UK Pound to Dollar Rate Exchange Rate (GBP/USD) Summary, Analysis and Forecasts June 2014

Modified: Monday, 30 June 2014 15:05 BST - Written by David Woodsmith

STORY LINK UK Pound to Dollar Rate Exchange Rate (GBP/USD) Summary, Analysis and Forecasts June 2014

Weekly outlook, analysis and forecasts for the Pound to Dollar (GBP/USD) Exchange Rate (20-27 June 2014)

At the start of the week the Pound was holding onto its highest level in five years against the US Dollar. Muted trading due to a lack of market moving domestic data for both the US and UK saw the Pound make little movement against its major peers.

The current global foreign exchange markets look this way:

- The pound to dollar exchange rate is +0.11 per cent higher at 1.70535 GBP/USD.
- The dollar to euro exchange rate is -0.1 per cent lower at 0.73220 USD/EUR.
- The dollar to pound exchange rate is -0.11 per cent lower at 0.58639 USD/GBP.

That all changed when on Tuesday when Bank of England Governor Mark Carney gave a dovish testimony to parliament’s Treasury Select Committee. Carney was accused of being like an ‘unreliable boyfriend’ as he changed his tone regarding a rate interest.

The BoE Governor widely disappointed the markets after saying that any rate increase will depend upon the continued release of positive data and said that when a rate rise does come they will be slow and gradual.

The US Dollar meanwhile advanced against most of its major peers following the release of better-than-expected US housing and consumer confidence data. New home sales soared to a six-year high and confidence climbed to its best level since 2008.


The ‘Greenback’ retreated somewhat overnight as concerns over Iraq dampened sentiment. News broke that Syrian jets had launched airstrikes in western Iraq as the war against the Islamist militants escalates.

Midweek the UK currency dropped below the 1.70 level against the US Dollar after it was weakened by dovish comments by Bank of England Governor Mark Carney. In testimony to parliament’s Treasury committee, Carney said the exact timing of rate rises would be driven by data and reiterated that when rate hikes did come they would be limited and gradual; investors were widely disappointed by his words. The currency is likely to stay under pressure throughout today’s session due to a lack of market moving UK data.

The ‘Greenback’ then advanced against most of its major peers following the release of better-than-expected US housing and consumer confidence data. New home sales soared to a six-year high and confidence climbed to its best level since 2008.

Pound Sterling suffers by dovish BoE comments

The Pound remained lower against most of its major peers as it continued to be weighed down by the dovish comments by Bank of England Governor Mark Carney. Against the US Dollar the Pound briefly slipped to a one-week low before recovering after the release of poor US data.

As a result of the far worse than forecast GDP data The US Dollar fell to its lowest-level in a month The GDP data for the first quarter of the year showed that the world’s largest economy contracted far more than expected.

As the week drew to a close the Pound was little changed as it held position at the 1.25 level and 1.70 levels against the Euro and US Dollar following a GDP report which widely matched investor expectations.

According to the Office for National Statistics its final reading for quarter on quarter growth matched market expectations for a figure of 0.8%. On an annual basis GDP rose by 3.0%, just short of economist forecasts for a figure of 3.1%.

Friday's figures also showed that business investment in the UK was up 5% quarter on quarter and 10.6% year on year, suggested the recovery was becoming more entrenched.
"The best news in the GDP data was the marked upward revision to business investment. This not only indicates that growth is becoming less centred on consumer spending but could also have positive implications for future productivity growth," Archer added.

Key data for GBP/USD next week

Monday June 30th – GBP Mortgage approvals data for May
USD –Pending home sales for May

Tuesday July 1st – GBP Markit/CIPS Manufacturing PMI
USD Manufacturing PMI
ISM Manufacturing PMI

Wednesday July 2nd – USD Adp Employment Change

Thursday July 3rd – USD jobless claims data
USD balance of trade data
ISM non-manufacturing PMI

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