GBP to USD Exchange Rate: Upside Forecast For Pound Dollar Exchange Rate On Weak US GDP Data

Modified: Friday, 30 May 2014 06:47 BST - Written by John Cameron

STORY LINK GBP to USD Exchange Rate: Upside Forecast For Pound Dollar Exchange Rate On Weak US GDP Data

GBP to USD Exchange Rate: Upside is forecast for the Pound to Dollar exchange rate on Thursday's weak US GDP data - The big news in the global currency markets yesterday afternoon was the publication of official figures which revealed that America’s economy shrank during the three months to the end of March. The US Dollar (currency:USD) traded steadily in the way of the release, which came during the middle part of the European equities session, but the Pound Sterling US Dollar exchange rate (GBP/USD) is by no means guaranteed to hold below the 4 ½ year high which it struck a few weeks ago following the development.

The Pound Sterling to US Dollar exchange rate is trading up +0.08% at 1.67368 GBP/USD.

Pound to Dollar exchange rate forecast back to 1.7 again

Economists had been anticipating a bad figure for the American growth number following a bitter winter in the States which subdued activity levels, however they were not expecting quite such a poor showing. The quarterly print of -1.0% was far worse than the -0.5% which industry insiders had been pricing in and it now appears highly unlikely that the Federal Reserve’s policymakers will countenance an interest rate hike any time soon. The upshot is forecast to send the Pound Sterling US Dollar exchange rate up towards the 1.7000 threshold once more.

Canadian Dollar (CAD) climbs vs Pound Sterling (GBP)

Elsewhere, better than anticipated Canadian current account numbers for Q1, published at the same time as the US GDP data, ensured that the Canadian Dollar (currency:CAD) climbed against the Pound on the day in spite of the disappointing data from the US. The Canadian figures pointed to a narrower than expected trade deficit of CA$12.4bn during the first three months of 2014. North America’s second economy relies heavily on its trade links, so the data provided a fillip, in relative terms at least, for investors holding CAD-denominated assets. Economists now forecast that the GBP CAD exchange rate may break down through the 1.8000 threshold sooner rather than later. However, tomorrow afternoon’s Canadian GDP figures for March have the potential to change all this.

To read further exchange rate forecasts or to compare exchange rates for an international money order, please refer to the main Currency News UK website.

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