BEST Pound to Dollar (USD) Exchange Rate in 2014, GBP Forecasted to Gain

June 17, 2014 - Written by John Cameron

STORY LINK BEST Pound to Dollar (USD) Exchange Rate in 2014, GBP Forecasted to Gain

Pound Dollar Rate Forecast - On Thursday the Pound Sterling (GBP) strengthened versus the Dollar as the US currency weakened in response to the FED's policy decision last night. A suggestion of maintaining existing interest rate levels and a further tapering its quantitative easing programme drove investors away from USD.

Sterling sees mixed results as we reach Thursday, as can be seen in the following rates:
- The Pound to Australian Dollar exchange rate is trading down 0.11 pct at 1.80633.
- The Pound Euro exchange rate is currently valued 0.18pct lower at 1.24853 GBP/EUR.
- The Pound to New Zealand Dollar rate is trading level today at 1.94976.
- The Pound Dollar exchange rate is priced 0.15pct higher at 1.70172 GBP/USD.

Contradictory data from the US on Monday afternoon meant that the Pound Dollar (USD) exchange rate languished within a tight trading range just short of its multi-year high at 1.7011. On the credit side, official figures revealed that the rate of price rises picked up speed in the States last month.

Investors had been anticipating that the year-on-year Consumer Price Index data for May would show that domestic inflation had remained at 2.0%. The slight and unexpected uptick to 2.1% suggested that the vast American economy is pulling away from the prolonged period of ultra-low inflation which it has experienced during recent months.

Short-term Pound Dollar rate forecast negative if FED tighten further

The data saw currency market participants scramble to adjust their bets regarding the prospects of a near-term interest rate hike from the US Federal Reserve. Wednesday night’s press conference from Fed Chair Janet Yellen could contain further clues for investors attempting to second-guess the exact timing of the Fed’s fist move in a fresh policy-tightening cycle. Any suggestion that the American economy is returning to normal trading conditions would be likely to send the Pound to Dollar exchange rate tumbling down towards the middle part of the 1.6000 – 1.7000 trading range.

However, yesterday afternoon’s below par set of US Building Permits data for last month, coupled with a disappointing Housing Starts figure, also for May, suggested that all is far from normal with America’s property sector. Both figures are considered key leading indicators of future activity levels in the American housing market, so the tame results may give Fed policymakers food for thought regarding the potential for a rate hike this side of Christmas. Any such tightening of policy would be likely to further subdue housebuilding activity and transaction levels in the US market and Fed board members remain highly cognisant of this. It near-term Dollar forecast (against Sterling) remains NEUTRAL TO POSITIVE.

Latest Pound Sterling, Euro & Dollar exchange rates today (19/06/2014)

The Pound Sterling to US Dollar exchange rate is trading up +0.11% at 1.70164 GBP/USD.
The Pound Sterling to Euro exchange rate is trading down -0.18% at 1.24852 GBP/EUR.
The Euro to Pound Sterling exchange rate is trading up +0.18% at 0.80095 EUR/GBP.
The Euro to US Dollar exchange rate is trading up +0.29% at 1.36293 EUR/USD.
The US Dollar to Euro exchange rate is trading down -0.29% at 0.73372 USD/EUR.
The US Dollar to Pound Sterling exchange rate is trading down -0.11% at 0.58767 USD/GBP.
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