Forecast - Pound to US Dollar Exchange Rate (GBP/USD) to see Further Losses

Modified: Thursday, 14 August 2014 17:25 BST - Written by John Cameron

STORY LINK Forecast - Pound to US Dollar Exchange Rate (GBP/USD) to see Further Losses

Currency News UK - Forecasts didn't predict the losses that came for the Pound to US Dollar Exchange Rate (GBP/USD) after Bank of England's Inflation Report - Yesterday’s afternoon session in the global currency markets brought the publication of the latest JOLTS Job Openings figure in the US. Ordinarily, the release is considered to be of minor significance, but this month’s edition proved to be market-moving.

The headline figure revealed that the level of jobs being advertised in the States had climbed to a dizzying 4.67m last month. The jump of almost 100,000 job adverts from the month before was well ahead of analysts’ expectations and brought the overall number to its highest level for 13 years.

In a move which surprised some analysts, the fall-out from the release saw the US Dollar (currency:USD) leak support against the Pound Sterling (currency:GBP), sending the GBP USD exchange rte up to as high as 1.6813 during the latter stages of the European equities session.

It has become conventional wisdom during recent weeks that positive jobs figures from the States are equally positive for the Buck due to the effect which they have on investors’ Federal Reserve interest rate expectations.

However, yesterday’s US job vacancy results must be viewed through the prism of a speech in Sweden from Federal Reserve Vice-Chair Stanley Fischer at the start of the week which hinted at possible structural problems in the vast American economy.

Fischer observed that the tentative economic recovery in the States may be held back by a lack of supply of labour in the domestic market. Yesterday’s data provided further fuel for these concerns and the Greenback shipped support as a consequence.

Looking ahead, this morning’s Bank of England Quarterly Inflation Report is likely to prove market-moving. June’s Mansion House speech from BoE Governor Mark Carney warned investors that a hike in UK interest rates, ‘could happen sooner than markets currently expect’.

If The Bank re-iterates this standpoint this morning, then look for the Pound to register healthy gains against the US Dollar, euro (currency:EUR) and the other major global currencies as the day wears on.

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