FX Currency Market Forecast British Pound Sterling Data Highlights ? Week Beginning 22nd February

February 22, 2016 - Written by Minesh Chaudhari

STORY LINK FX Currency Market Forecast British Pound Sterling Data Highlights ? Week Beginning 22nd February

Easing Federal Reserve Rate Hike Expectations Weigh on US Dollar Demand

Significant data releases in the global currency markets are loaded to the second half of this week’s session. There are no tier one statistics out today, but tomorrow afternoon’s US Consumer Confidence survey has the potential to be market moving.

Support for the US Dollar (currency : USD) has ebbed since the turn of the year as investors’ expectations of another Federal Reserve interest rate hike eased. Futures markets now imply a 62.1% chance that the cost of borrowing in the States will remain at its current level of 0.50% for the rest of this year, at least.

The February gauge of the mood amongst US economic participants is expected to show a drop-off from January’s reading of 98.1. Given the turmoil in the world’s financial markets during the past four weeks, a print of below this is highly possible. Such an outcome would send the Pound US Dollar exchange rate higher once more, assuming today's 'Brexit' fears wear off soon although this is unlikely.

US Consumer Confidence, Durable Goods Orders to Provoke US Dollar Exchange Rate Volatility

Two more data sets from the States dominate the latter part of the week. If Tuesday’s US Consumer Confidence survey disappoints, then a weak showing from Thursday’s US Durable Goods Orders figure will take on added significance, with a result of below the anticipated 3.0% further hurting the Buck.

The next day’s Q4 US Gross Domestic Product number is the centrepiece tier one data set of the week, with a 0.8% result expected. A poor outcome is forecast to hit the high yielding Commodity Dollars (AUD, NZD, CAD), as well as the Greenback.

Political Uncertainty Continues to Weigh on Sterling Demand

Meanwhile, the latest Gross Domestic Product data from the UK is penned in for publication on Thursday.

With political uncertainty driven by the forthcoming European Union In / Out referendum hanging over the Pound, a showing of below the expected year-on-year result of 1.9% is forecast to cause investors to scale back their expectations for a Bank of England interest increase this year. Such an outcome would trigger broad selling pressure on the UK unit.

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 Pound Sterling Forecasts