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GBP/USD Fluctuates on Central Bank Speculation

Last week’s high: $1.4064

Last week’s low: $1.3861

BoE Rate Speculation Helps Pound to Rally

The Pound stumbled against the US Dollar throughout much of last week’s session as both the UK’s latest employment and GDP figures came in worse than expected.

However Sterling sentiment was able to recover at the tail end of the week following increased speculation that the Bank of England (BoE) would target a May rate hike.

Meanwhile the US Dollar started off strong last week as renewed confidence in the US currency was buoyed by the minutes from the Federal Reserve’s latest policy meeting.

However while markets welcomed the hawkish minutes, a drop in US Treasury yields led USD to relinquish some of its gains at the end of the week.

USD Outlook: GDP Figures to Weaken USD?

Looking ahead, the US Dollar may come under pressure this week as the US publishes its latest GDP estimate, which is expected to confirm that economic growth slumped from 3.2% to 2.5% in the fourth quarter.

However the Pound may also struggle this week with the publication of the UK’s latest PMI figures as economists forecast that activity in the manufacturing and construction sectors is likely to remain muted in February after slumping at the start of the year.

Key Events

26th February

09:30 UK Mortgage Approvals Jan

15:00 US New Homes Sales Jan

27th February

13:30 US Durable Goods Orders Jan

28th February

00:01 UK Consumer Confidence Feb

13:30 US GDP Q4

1st March

09:30 UK Manufacturing PMI Feb

15:00 US ISM Manufacturing PMI

2nd March

09:30 UK Construction PMI Feb

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

 

Arron Morris
Senior Currency Broker
T: 01442 892 065

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