Pound to Dollar Forecast: Analysts Predict Re-Rating to 1.7192 GBP USD

Modified: Sunday, 10 May 2015 22:54 BST - Written by John Cameron

STORY LINK Pound to Dollar Forecast: Analysts Predict Re-Rating to 1.7192 GBP USD

The latest Commitment of Traders (COT) Report, released by the US Commodities Futures Trading Commission (CFTC) on Friday afternoon, added fuel to the bonfire of speculation that support for the US Dollar (currency:USD) may have topped out, for 2015 at least.

The CFTC data revealed that, for the sixth week on the trot, large scale speculators had cut their bets that the Buck would increase in value. The amount of speculative money betting that the Greenback will increase in value now stands at its lowest level since last September. Drilling down into the numbers, analysts noted that the net level of bullish bets on the Buck stood at $32.25bn on Tuesday 5th May – this was significantly down from the previous week’s result, which had shown at $34.75bn.

Looking at the charts, the highest trading level for the Pound Sterling US Dollar exchange rate during the month of September 2014 was 1.6644 GBP USD. Last Friday’s peak for the Pound against the Dollar saw the pair change hands at an intraday high of 1.5523 as the UK unit basked in a wave of post-General Election euphoria. Significantly, GBP USD held below its 4-month high of 1.5552 on the day in spite of the burst of support for Sterling. With the CFTC figures suggesting that the strong support for the Dollar since the latter part of last year is now waning, a renewed move higher towards its multi-year high of 1.7192 could be on the cards for the pair.

One constraining factor on the potential re-rating of GBP USD to the levels of last Summer is the possibility of improved US data over the next six months. The Greenback has been hit hard by a highly disappointing set of Q1 GDP data, published within the past few weeks, which has caused many analysts to suggest that the Federal Reserve may now wait until 2016 before increasing its headline interest rate.

However, the slow American growth at the start of this year was caused by unseasonably inclement weather last Winter, leading many analysts to forecast a strong improvement for the US Q2 GDP data, out in the middle part of Summer. Commentators predict that such an outcome will help shore up support for the Buck.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Currency Predictions Dollar Poun Forecasts