GBP/USD Exchange Rate Rockets as UK Growth Revised up
The Pound US Dollar (GBP/USD) exchange rate is rising sharply this morning as markets welcome an upward revision to the UK’s latest GDP figures.
At the time of writing the GBP/USD exchange rate is up 0.7%, with the pairing rallying by over a cent from the eight-month low struck on Thursday.
Pound (GBP) Exchange Rate Jumps, Can Slight Lift in UK GDP Improve Rate Hike Odds?
The Pound (GBP) is flying high this morning, surging over a cent against the US Dollar (USD) as investors react to the latest UK GDP reading.
According to data published by the Office for National Statistics (ONS) the UK economy expanded by 0.2% in the first quarter.
This saw growth revised up from previous estimates of 0.1%, with the final reading being lifted by improvements made by the ONS to its methods of measurement.
The UK’s gloomy start to the year was seen as one of the key reasons for the Bank of England (BoE) to delay a rate hike in May, so this slight improvement in growth could help to bolster the chances of the bank committing to a hike later in summer.
US Dollar (USD) Exchange Rate to be Bolstered by US PCE Inflation Report?
While the US Dollar (USD) is currently on the back foot against the Pound, following Thursday’s weaker-than-expected US GDP figures, the ‘Greenback’ may be poised to strike back this afternoon.
USD investors are optimistic that today’s PCE Price Index will report that US inflation remained solid in May, likely lending strength to the US Dollar.
The PCE price index is seen as the Federal Reserve’s preferred measure of inflation, so a strong result today is also likely to help bolster expectations that the Fed could pursue a more aggressive pace of monetary tightening.
GBP/USD Exchange Rate Forecast: Will Slowing Private Sector Grow Drag on Sterling?
Looking forward to next week’s session, the GBP/USD exchange rate may be met by losses as the UK publishes its latest PMI figures.
Economists currently forecast that, following a robust lift in the UK’s private sector in May, activity will have slipped back this month, likely leading to the Pound (GBP exchange rate trending lower through the first half of the session.
Meanwhile the US Dollar (USD) is likely to be more data driven over the coming week, with the focus for most USD investors likely to be on the latest US payroll figures on Friday.
This may see the US Dollar rally extended even further should the US workforce have expanded at a solid clip in June as some analyst suggest.