Poor US Data Holds Back USD to GBP Exchange Rate Forecast

August 12, 2016 - Written by Ben Hughes

STORY LINK Poor US Data Holds Back USD to GBP Exchange Rate Forecast

Pound Sterling (GBP) Exchange Rates Still Struggling on Muted Sentiment

The Pound Sterling (currency : GBP) has once again endured a dismal day on the currency markets as investors continue to price-in the Bank of England’s threat of last week to further loosen its already ultra-loose monetary policy. The latest Bank of England (BoE) Monetary Policy Committee meeting minutes ominously warned that,

‘If the incoming data prove broadly consistent with the August Inflation Report forecast, a majority of members expect to support a further cut in Bank Rate to its effective lower bound at one of the MPC’s forthcoming meetings during the course of the year. The MPC currently judges this bound to be close to, but a little above, zero.’

GBP to EUR Could Hit New Low on Further BoE Easing

The spectre of a drop in UK interest rates to closer to zero from their current record low of 0.25% hangs over the Pound, making investors extremely reluctant to hold Sterling-denominated assets. This factor helped to send the Pound euro exchange rate down into the 1.1500s GBP EUR during this afternoon’s session and many analysts are now predicting that the pair will trend lower towards its key level of support at 1.0200 which it touched off during the final days of 2008.

Pound Forecast to Record Losses Vs Euro, US Dollar in the Medium Term

Meanwhile, the Pound US Dollar exchange rate has also edged lower throughout this afternoon’s trading, dropping to an intraday low of 1.2937 GBP USD. The losses for Cable would have been of a greater magnitude were it not for a brace of disappointing data sets from the States this afternoon; analysts had been expecting July’s US Advance Retail Sales data, published at 1330hrs BST today, to show a slight reduction to 0.4% from June’s counterpart figure. The result of 0.0% therefore held back the Buck and this month’s Michigan Confidence survey, out at 1500hrs, also hurt the Greenback, printing at a below-par 90.4. However, analysts forecast that the Pound could incur further losses against both the Dollar and the euro into the medium term.

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: Daily Currency Updates Dollar Pound Forecasts Pound Dollar Forecasts