Weekly Dollar to Pound Exchange Rate Roundup & USD/GBP Outlook

Modified: Sunday, 30 November 2014 22:52 BST - Written by Toni Johnson

STORY LINK Weekly Dollar to Pound Exchange Rate Roundup & USD/GBP Outlook

Dollar to Pound Sterling Exchange Rate Analysis for the Last Week

The US Dollar had a strong week as a number of geopolitical events bolstered demand for the safe haven currency. Further gains were restrained however as some domestic data raised speculation that the world’s largest economy could be facing headwinds over the coming months.

At the start of the week, the US Dollar strengthened and continued to trade higher against most of its major peers as it continued to receive support from the diverging monetary policy stance between the Federal Reserve and other major central banks. As the session progressed the currency softened slightly as Purchasing Manager Index (PMI) data came in softer than forecast.

On Tuesday, the US Dollar firmed against most major peers as it continued to find support from the previous week’s Federal Reserve minutes release, which showed that Fed officials believe that the nation’s economic recovery is strong enough to resist external threats. Further gains were restrained by data, which showed that service sector activity slowed in November. The main event of the session was the latest US Gross Domestic Product (GDP) data, which showed that the world’s largest economy expanded at a better rate than forecast.

Midweek, the US Dollar was little moved against the Pound following the release of Tuesday’s mixed data releases. The report, which showed that the world’s largest economy expanded more than forecast was countered, somewhat by a separate report which showed that US consumer confidence dropped sharply in November. The currency then softened later in the session as data showed that the number of unemployment benefit claims in the USA rose more than forecast. New home sales data also came in below economist expectations.

On Thursday, the US Dollar experienced light trading as US markets were closed for the Thanksgiving Holidays. With no domestic data due the ‘Greenback’s’ movements will depend on data released elsewhere. The Pound was also little changed due to a lack of market moving economic data.

As the week ended, the US Dollar advanced against most of its major peers despite the US markets being closed for the Thanksgiving Holiday. The ‘Greenback’ advanced after OPEC took no action to ease an oversupply of oil in the worlds markets. After the OPEC meeting, the US Dollar advanced strongly against oil related currencies such as the Canadian Dollar and Norwegian Krone.

Looking ahead to next week, the major event for the USD/GBP exchange rate will be the Bank of England interest rate decision due on Thursday.

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