Since my last post the GBP/USD cross has dropped back below $1.68 after some dovish comments in the Bank of England minutes yesterday and a string of positive data releases for the States today. Since Tuesday GBP/USD exchange rates have fallen from $1.6837 to a low of $1.6767 this afternoon.
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The dollar was able to make some inroads into the pounds recent gains following a number of positive data releases this afternoon. Durable goods orders, continuing jobless claims and the EIA natural gas storage numbers all came in higher than forecast helping to boost the dollars value.
The gains were short-lived though as by the time the European markets closed GBP/USD was closing on the $1.68 mark again. This could be down to the markets beginning to price in the UK retail figures which are due out tomorrow morning, the retail sector is expected to grow by 0.1% tomorrow but quite a few analysts are predicting the figure could be higher.
A positive reading tomorrow could push GBP/USD back over $1.68 and take us back towards the levels we witnessed on Tuesday.
What to look out for.
Next week sees the release of the preliminary UK GDP figures for Q1. This is sure to cause some volatility in the currency markets especially with the Bank of England raising the UK growth forecast yesterday from 0.9% to 1%. In the states, the FED will give their next monthly statement and could announce another round of tapering. This could strengthen the dollar slightly but seeing as an interest rate rise has been put on the back burner the gains could be limited.
The UK recovery seems to be gaining momentum and this has been highlighted by the economic figures we have seen over the past few weeks. If the GDP figures come in higher than 0.7% there is every chance we could see GBP/USD push towards $1.70.
I will keep you posted of any developments but in the meantime if you are looking to buy or sell dollars in the coming weeks and want to make sure you are getting the best possible rate, use the link below to complete the contact form or call me directly on 0044 (0) 1442 892 065.
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