July 5, 2015 - Written by John Cameron
STORY LINK Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Trend within Close Range on Damp Market Sentiment
Pound Sterling (GBP) Exchange Rate Forecast to Trend within Tight Range against the ‘Greenback’ (USD) after UK Services Better Predictions
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending within a narrow range on Friday afternoon.
In response to positive British ecostats, the Pound strengthened versus its peers on Friday. The Markit/CIPS UK Services PMI advanced beyond expectations of a rise from 56.5 to 57.5, with the actual result climbing to 58.5 in June. In addition, the UK Composite PMI came in at 57.4 in June; eclipsing the market consensus of 56.7. The drag from poor manufacturing output was overshadowed by positive construction and services growth.
Commenting on the Services PMI, Chris Williamson, Chief Economist at Markit said; ‘While uncertainty caused by the Greek debt crisis rules out any imminent hike in interest rates, the post-election rebound in service sector business activity adds to the likelihood of the Bank of England starting to nudge rates higher later this year. The survey data are indicating an acceleration of economic growth to 0.5% in the second quarter, up from 0.4% in the first three months of the year.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate has fallen to a low of 1.5599 today.
US Dollar (USD) Exchange Rate Forecast to Hold Steady against the British Pound (GBP) Despite Absence of Domestic Data
Despite the fact that there was a complete absence of US economic data on Friday, the ‘Greenback’ managed to avoid depreciation. The US asset is still holding a comparatively weak position, however, after Thursday’s jobs data printed poorly. This caused many futures traders to delay bets as to the timing of a Federal Reserve rate hike.
The Pound Sterling to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.5616.
The main reason that the US asset avoided further depreciation is heightened demand for safe-haven assets ahead of Sunday’s Greek austerity referendum. With so much resting on the outcome, and with mounting uncertainties about what either a yes or no will mean for Greece and the wider currency market, trader risk-appetite has diminished exponentially.
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Forecast to Fluctuate ahead of Greferndum
Although many analysts are predicting the fallout from a Grexit would be contained, most people are unsure as to the actual ramifications on the wider currency market. The only certainty at this point is that however the Greek’s vote there will be market volatility. With that in mind, and given the Us Dollar’s safe-haven nature, the Pound Sterling to US Dollar (GBP/USD) exchange rate is likely to fluctuate ahead of the Greek referendum on whether or not to accept austerity in return for financial aid.
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced to a high of 1.5644 during Friday’s European session.
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