Foreign exchange markets find the British pound to dollar conversion rate peak at the best level of 1.466 today. Sterling (GBP) has rallied against a weaker US dollar but what's in store for cable in the near, medium and long-term forecasts?
Currency exchange markets have witnessed the British pound to dollar exchange rate rise to the best conversions of 2016 this week.
The coming week will bring high-impact announcements for the UK and the US, though distribution is geared more heavily to the latter currency.
One of the biggest UK events to come this week will be Thursday’s local elections, which may end up depriving notable ‘In’ or ‘Out’ supporting MPs of their seats.
The US Dollar exchange rates may have the least say in the coming week, when Friday brings the change in non-farm payrolls and unemployment rate data.
Other Foreign Exchange News
Latest Pound/Dollar Exchange Rates
On Thursday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.857
FX markets see the pound vs euro exchange rate converting at 1.167.
FX markets see the pound vs pound exchange rate converting at 1.
NB: the forex rates mentioned above, revised as of 25th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
The appeal of the US Dollar exchange rates dropped considerably on Thursday, with the latest high-impact US announcements doing little to encourage investment in the USD.
Although large numbers of economists accurately predicted that the Fed would leave the interest rate frozen, some were still holding out hopes that an April interest rate rise was on the cards.
As it stood, the Fed’s lack of action on the US interest rate severely deflated the enthusiasm of USD investors overnight, with the fact that the next opportunity to raise the rate isn’t until June only compounding the issue.
Worries over the April German Consumer Price Index report have failed to particularly weigh on the EUR/USD exchange rate, despite expectations of a dip in domestic inflation.
With a weaker first quarter US GDP print likely to dent the odds of a June interest rate hike from the Fed, foreign exchange markets continued to move away from the US Dollar.
US Claims Data and GDP Figures due Today, Forecasts Generally Poor
The USD may continue its current downwards spiral later on in the day, as the anticipated economic announcements have not been forecast with anything resembling positivity.
In the first instance, the initial jobless and continuing claims results for April will be announced; these are expected to rise in both cases.
At the same time, the annualised Q1 GDP result will be announced; this is expected to show a decline from 1.4% to 0.6%.
Pound Sterling (GBP) exchange rates decline overall along with falling house prices
The Pound has declined against a number of peers today, although sizable gains have also been recorded across the spread of GBP pairings.
The most notable domestic data announcement has consisted of the Nationwide house prices for April, which have fallen on both the month and the year.
Tomorrow morning will bring the announcement of the UK mortgage approval and net consumer credit results for March; current forecasts are for a reprint at 1.3bn in the latter category and a rise from 73.9k to 74.4k in the former.
Euro (EUR) Exchange Rates Mixed Today as German Unemployment Drop Clashes with Greek Unrest
The Euro has been a decidedly uncertain prospect today, having advanced against the US Dollar and South African Rand but depreciated heavily against the Japanese Yen and by a lesser extent against the Pound Sterling.
Eurozone developments of note include German unemployed persons falling in number by -16k in April; this has been countered by the increasingly evident concern of EU officials over Greece’s continued difficulties in meeting the requirements for bailout fund distribution.
The last Eurozone ecostats of the week will be tomorrow morning’s mixed-forecast German retail sales for March and Eurozone unemployment rate, inflation rate and GDP outcome for March, April and Q1 respectively.
Yesterday saw a more rounded set of gains recorded by the common currency.
Fed Rate Freeze Decided by Disappointing US Domestic Data
The most recent damage to the US Dollar was almost certainly done by the Federal Open Market Committee (FOMC), in its decision to leave the US interest rate on hold.
In the wake of the announcement, the FOMC releases a statement stating that ‘Growth in household spending has moderated, although households' real income has risen at a solid rate and consumer sentiment remains high’.
In response to the news, Deutsche Bank Chief US Economist Joseph LaVorgna said:
‘That tells me that June is effectively off the table. They did not do enough, they have to put that statement back in for them to hike rates’.
This goes against earlier DB forecasts.
Leading GBP to USD Exchange Rate Forecasts
We examine the latest pound to dollar exchange rate forecasts and predictions from leading financial institutions.
Citibank analysts see a rise in the sterling-dollar cross in the medium to long term outlook:
"In short term, Citi analysts expect GBP’s upside may be limited ahead of the vote as uncertainty may be affecting the economy. In longer term, Our base case is no Brexit. A win for the ‘Remain’ campaign may conceivably remove this uncertainty and the real economy strengthens accordingly. Thus, Citi analysts expect GBP/USD may trade around 1.43 in coming 0-3 months and rebound to 1.53 in coming 6-12 months."
Scotiabank's economists agree the overall trend is higher:
"Momentum signals are bullish, DMI’s hint to a strengthening trend, and we look to further gains following the resolution of recent congestion just below 1.46 GBPUSD."
Today will bring UK and US data, although the US contributions may win out overall
As markets enter the end-of-week session, the GBP/USD advanced to a daily high of 1.466 before falling back to trend just over the key 1.46 level.
The UK contributions worth mentioning today include the pessimistically-predicted Gfk consumer confidence survey and more positively-forecast mortgage approvals result for March.
For the US, influence is expected to be had by March’s expected-to-rise personal income result, as well as the University of Michigan finalised confidence score for April.
Today's Sterling-Dollar Exchange Rate Recovers as US Personal Spending Falls Short
A weaker-than-expected first quarter US GDP prompted the US Dollar (USD) to cede further ground to rivals, as the chances of the Fed opting to raise interest rates in June continued to diminish.
However, as the latest UK Mortgage Approvals data also proved discouraging, the Pound Sterling to US Dollar (GBP/USD) exchange rate remained on a narrow downtrend on Friday morning.
The GBP/USD spot managed to recover losses though as the afternoon session progressed and advanced 0.23% higher compared to the day's open.
The latest US Personal Spending fell short of market expectations.