CR: Pound to US dollar Exchange Rate Outlook: Rally to be Scuppered by a Data
The pound dollar exchange rate trades at inter-year highs around the 1.6848 level.
The dollar to pound conversion therefore works out at 0.5935.
Be aware that all our forex quotes are mid-market rates; the spread will be widened by your bank or payment provider when delivering a retail FX rate.
However, an independent currency provider will guarantee to undercut this spread; thereby delivering up to 5% more currency.
Best dollar rates since 2009
For those looking to buy US dollars with pound sterling, it should be kept in mind that we are witnessing the best levels in the rate since 2009.
"From here our previously mentioned resistance level of 1.6880 and then the psychological 1.70 are still the targets in play. It would take a dip back below 1.6760 to suggest that the upside is losing traction," says a client note issued by International FX.
The outlook continues to favour the British pound over the US dollar purely based on technical observations.
Momentum and a host of other technical studies confirm the GBP should continue to gain purely based on past performance.
However, whether or note fundamental news and data-flow proves supportive is where the risk lies.
The week starts with ongoing tensions between Ukraine and Russia. The US and EU step in for additional sanctions on Russia as the Geneva accord is not implemented as agreed.
"We have an event-full trading week ahead. UK releases the 1Q preliminary GDP figures on Tuesday; Euro-Zone April CPI estimate and March unemployment figures are due on Wednesday and Friday," note Siwssquote Bank in a client brief.
The BoJ and the FOMC meet on Wednesday, the BoJ will release its semi-annual economic outlook report. On Friday, the US nonfarm payrolls will keep the attention focused on the Fed’s policy.
Interest rate rises keep sterling dollar exchange rate higher
Thursday’s theme of an interest rate rise in the first quarter of 2015 with Britain's strengthening economy carried through to Friday morning upon the release of UK retail sales figures.
A monthly gain of 0.1% in March against a forecast of a 0.4% decline was enough to give Sterling a little boost across the board.
Markets: Ford, Amazon earnings
Mike van Dulken, Head of Research at Accendo Markets, commented to clients this morning;
The FTSE 100 is demonstrating resilience in the face of some disappointing results at Amazon (denting tech sector) and Ford.
Commenting, is Micheal van Dulken at Accendo Markets:
"Having closed last week on a downer as the Ukraine/Russia situation deteriorated we have started the new week on the front foot, shrugging off concerns and focusing more on continued M&A talk on Pfizer/AstraZeneca and a ratings upgrade for Spain and already traded close to last week's 6725 highs.
"While the appetite for a breakout remains, bear in mind that this will be another big week for earnings (US of course, and UK with LLOY and RBS) as well as economic data with updates on European CPI, US GDP, Fed Policy and US Non-Farm Payrolls."
