Pound US Dollar Exchange Rate Flops, What Next?

November 23, 2016 - Written by Minesh Chaudhari

STORY LINK Pound US Dollar Exchange Rate Flops, What Next?

Pound Sterling (GBP) Rate Slumps as Autumn Statement Looms

Pound Sterling (GBP) exchange rates have been performing poorly, with the currency having fallen against the US Dollar (USD) and virtually all of its other regular peers.

Tuesday’s UK news consisted mainly of the Confederation of British Industry (CBI) industrial trends for orders, which showed a significant improvement from -17 to -3.

The overriding concern was that anti-UK sentiment in the EU could lead to the EU ‘punishing’ the UK with a ‘Hard Brexit’, something that would likely seem high UK economic turbulence. Fears of this occurring sent the Pound down across the board during Tuesday’s trading session.

Pound US Dollar Exchange Rate Forecast to Flop if Hammond Unveils Lacklustre Budget

The next GBP/USD influencing news will come shortly, when Chancellor Philip Hammond delivers the Autumn Statement and sets up future UK economic projects and plans.

Hammond is broadly forecast to give an unexceptional statement, with the recent and widespread concerns about how Brexit will function likely to limit any possible surprises the Chancellor has to offer.

The basic message is expected to be one of damage-control, keeping the lowest-income households afloat while making tentative steps towards a growing UK economy in late 2017.

US Dollar Pound Exchange Rate Rises on US Data

While no US data has been released yet today, the US Dollar has still been dominant against the Pound and a number of other peers, owing to continued support from Tuesday afternoon’s data releases.

In a pair of forecast-beating outcomes, the October existing home sales result rose from 5.49m to 5.6m, while the Richmond Fed manufacturing index for November climbed from -4 to 4 instead of falling to -5 as expected.

Elsewhere, President-Elect Donald Trump continued to generate uncertainty about his future leadership, with an off-and-on meeting with the New York Times grabbing media attention late in the day.

US Dollar (USD) Outlook Uncertain on Possible Low-Impact Fed Minutes

The next big US economic figures to watch out for will arrive this afternoon, consisting of the October durable goods orders result. This has USD-supportive rise forecast, from -0.1% to 0.8%.

Also out over the afternoon will be the new home sales figures for the same month, which are expected to slow down slightly from 593k to 580k.

Closing off US data this afternoon will be the Fed’s minutes for its November interest rate decision, which saw another rate freeze take place because of the US Presidential Election.

Given that the outcome – Trump being the victor – was highly unexpected, it is unlikely that the Fed’s minutes will provide much illumination on the future.

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