Losses Forecast for Pound to Dollar?

October 1, 2015 - Written by John Cameron

STORY LINK Losses Forecast for Pound to Dollar?

The Pound Sterling (currency : GBP) struggled to break into positive territory against most of the other sixteen most actively traded global currencies during yesterday’s session. The UK unit was weighed down by the morning publication of the final version of the UK’s Q2 Gross Domestic Product data, which revealed that the British economy expanded by an annualised 2.4% in the year to the end of June. However, drilling down into the figures, analysts noted one silver lining for the Pound – a pronounced upward revision in the pace of UK economic growth during the period 2011 – 2013. These improved historical numbers suggest that the local economy expanded by 5.9% during this period.

This was not the only piece of mildly encouraging news for the UK unit on the day. The latest Office of National Statistics current account figures showed that Britain’s balance of payments deficit had narrowed by a significantly larger than expected amount during the three months to the end of June. The reduction from Q1’s counterpart figure of £24bn to £16.8bn in Q2 moves the domestic economy a step closer to self-sufficiency and FX insiders forecast that Sterling will benefit in coming sessions.

Looking ahead, the remainder of this week’s session is predicted by FX insiders to be seminal for more than one major global currency. The epicentre for price action, not for the first time during recent months, will be the USA. Look for a strong showing from this afternoon’s ISM Manufacturing Survey of America’s vast manufacturing sector to stoke market whispers regarding a December US Federal Reserve interest rate hike. If this is followed on Friday afternoon by a Non-Farm Payroll print of above the anticipated 202,000, then expect interest rate ‘lift-off’ hype to reach fever pitch. Such a combination of data results would be almost certain to send the Pound Sterling US Dollar exchange rate back down into the 1.4000s.

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TAGS: Pound Dollar Forecasts