Further Gains Predicted for Pound Sterling US Dollar GBP USD Exchange Rate on Federal Reserve Comments

Modified: Friday, 19 June 2015 17:01 BST - Written by John Cameron

STORY LINK Further Gains Predicted for Pound Sterling US Dollar GBP USD Exchange Rate on Federal Reserve Comments

FX News Now - Additional GBP/EUR, GBP/USD Exchange Rate Gains Expected

Price action in the afternoon’s session in the global currency markers has once again been dominated by the ongoing Greek debt wrangle, but data released from the US has also had a pronounced effect on US Dollar-denominated pairs.

Analysts were confidently forecasting that the latest American Consumer Price Index data would reveal that the pace of US price rises had slightly decreased to an annualised 0.1% last month. However, the figure missed target to the downside, showing at a year-on-year 0%; the fact that the US economy once again failed to experience any annualised price rises decreases the pressure on the US Federal Reserve to countenance an interest rate hike. Fed Chair Janet Yellen hedged her bets last night, surprising some investors by commenting that, ‘most policy-makers are anticipating a rate increase this year.’ Earlier this year, market participants had been almost unanimous in anticipating with some certainty a tightening of US monetary policy before year end – now they’re not so sure. The change of message from the Fed has seen the market move against the Buck, sending the Pound Sterling US Dollar exchange rate Northwards to close to the 1.6000 threshold.

UK Retail Sales Data Boosts Pound Sterling (GBP) against Euro (EUR), US Dollar (USD), Australian Dollar (AUD)

Elsewhere, this morning’s session was notable for the publication of stronger than anticipated UK Retail Sales data for the second month on the trot. The May figures showed at an annualised 4.6% - exactly the same number as counterpart April number. The release from the Office of National Statistics was blamed on a fall-off in the level of internet clothing sales following colder than usual weather in Britain last month.

Forex Forecast - Pound Sterling (GBP) Exchange Rate to Extend Advance before the Weekend?

Looking ahead, the highlights for tomorrow include a continuation of the ongoing eurogroup Finance Ministers’ meeting in Luxembourg and the publication of the latest Canadian Consumer Price Index inflation figures. Analysts forecast that this risk events could send the Pound Sterling Canadian Dollar exchange rate higher into the 1.900s.

The GBP/EUR exchange rate was trending in the region of 1.3924

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