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GBP Trends Higher, USD Weakness Could Persist if FOMC is Dovish

Published: 29 Apr at 11 AM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, Australian Dollar, New Zealand Dollar, Canadian Dollar, Australia, New Zealand, USA, Canada, Germany,

Pound Sterling
With Rightmove data showing stronger-than-forecast UK house price growth in April, the Pound gained on a number of its rivals. Sterling was trending higher against both the Euro and US Dollar in spite of Tuesday’s GDP report revealing a sharp slowing in first-quarter expansion.

The common currency fluctuated on Wednesday as investors responded to a number of sentiment measures for the Eurozone. Although the Eurozone Business Climate Indicator and the region’s Services Confidence index showed improvement, gauges of Consumer, Economic and Industrial sentiment all fell unexpectedly. Wednesday’s German CPI will trigger additional EUR movement.

US Dollar
With the US Consumer Confidence index declining and the prospect of a summer interest rate increase from the Federal Reserve fading, the US Dollar was trending lower almost across the board. However, it’s possible that the ‘Greenback’ could recover a little strength if today’s US GDP data shows the expected improvement.

Australian Dollar
A lack of ‘Aussie’ data limited the South Pacific currency’s movement overnight, but the Australian Dollar did slip back below the 80 cents level against the US Dollar ahead of the Federal Open Market Committee (FOMC) interest rate announcement.

New Zealand Dollar
New Zealand’s disappointing Business Confidence reading saw the ‘Kiwi’ trim gains after a separate report revealed a wider-than-anticipated domestic trade surplus. With the Reserve Bank of New Zealand’s interest rate decision looming, further New Zealand Dollar volatility can be expected.

Canadian Dollar
The Canadian Dollar maintained a bullish relationship with its US peer following a speech from Bank of Canada Governor Stephen Poloz. As Poloz implied that interest rates will remain on hold for now, the ‘Loonie’ was able to gain on several of its rivals.
As of Wednesday, 29th April 2015, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.3878, GBP USD exchange rate was 1.5428, GBP AUD exchange rate was 1.9292, GBP NZD exchange rate was 2.0261, and GBP CAD exchange rate was 1.854.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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