GBP USD Exchange Rate Climbs after Impressive Data

November 29, 2016 - Written by James Fuller

STORY LINK GBP USD Exchange Rate Climbs after Impressive Data

The GBP USD exchange rate rose this morning after some upbeat data on the UK economy helped allay investor concerns that the nation had been negatively impacted by 'Brexit'.

Pound US Dollar (GBP USD) Rallies on Positive Ecostats

The Pound US Dollar (GBP USD) rallied today, recovering almost all of yesterday’s losses as markets reacted to some impressive data from the UK economy.

Investor sentiment improved as UK Consumer Credit rose by £1.62bn in October up from £1.48bn the previous month surging past forecasts that it would only see a modest rise to £1.5bn, bringing the annual growth rate to 10.5%, the strongest since October 2005.

Sterling was strengthened further by a better than expected rise in mortgage approvals in October, soaring past predictions of around 65,000 to jump from 63,594 to 67,518. Markets were upbeat about the data, with analysts predicting that it may signal future growth in UK house prices.

US Dollar (USD) Bolstered by GDP Figures

The US Dollar received a boost from today’s US GDP report that showed that America’s economy grew at a faster pace in the third quarter.

The GDP rose to 3.2%, up from 2.9% in the second quarter, outpacing predictions that it would only rise to 3.0% and reaching a new two-year high, as Adam Samson of the Financial Times explains;

‘The data released on Tuesday confirm that the economy expanded in the third quarter at the fastest rate in two years, representing a sharp pick-up from the 0.8 per cent and 1.4 per cent pace logged in the first and second quarters, respectively.’
The rise has partly been attributed to strong growth in personal consumption as it also rocketed from 2.1% to 2.8% in the third quarter, beating expectations that it only reach 2.3%.

GBP USD Exchange Rate Forecast: Markets Await BoE Financial Stability Report

The GBP USD exchange rate may rise tomorrow if the Bank of England’s (BoE) Financial Stability Report presents a positive outlook for the UK economy, however with the challenges facing the UK economy with 'Brexit', there is a reasonable chance that the report will strike a more dovish tone, pressuring Sterling.

Tomorrow’s Gfk Consumer Confidence Survey may also weigh on the Pound if it drops from -3 to -4 as forecast amid growing consumer concerns that they will face price rises next year due to the devaluing of GBP.

Meanwhile the US will release its own Consumer Confidence survey later this afternoon, which is expected to show a rise from 98.6 to 101.5 in November, possibly strengthening the US Dollar.

The report’s impact on the ‘Greenback’ may be negligible, however, as most investors have already priced in a December rate hike and it is doubtful that any data is likely to effect the Fed’s decision to raise interest rates by the end of the year.

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TAGS: Pound Dollar Forecasts Pound Sterling Forecasts