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Will GBP/USD Fall to New Lows?

Last week’s high: $1.3605

Last week’s low: $1.3453

GBP/USD Close to 5-Month Low

The Pound struggled against the US Dollar last week, trading at its lowest level since December 2017.

The deterioration was partly caused by Bank of England (BoE) Deputy Governor Ben Broadbent, who labelled the UK economy as ‘past its peak’.

In US news, retail sales growth slowed in April, but still proved positive enough to raise confidence among USD traders.

USD Outlook: Risk of Volatility on UK Inflation and Sales Data

There could be turbulence ahead for the Pound as high-impact UK inflation, sales and GDP data will be coming out this week.

The GBP/USD exchange rate could fall if inflation rises, as this will risk a return to economically restrictive wage squeeze conditions for UK households.

The retail sales data might be more supportive; forecast-matching growth could reassure GBP traders and boost the Pound.

Weekly GDP/USD movement might end with another decline, however, as Friday’s GDP stats are predicted to show slowing activity in Q1 2018.

There may be a midweek US Dollar to Pound advance when Federal Reserve minutes are released.

If the minutes hint at another US interest rate hike as early as June, the US Dollar could rise sharply.

In addition to potential Pound losses, the US Dollar could also drop on Friday if durable goods orders show the forecast -1.4% decline.

Key Events

23rd May

09:30 UK Inflation Rate

19:00 US Federal Open Market Committee (FOMC) Minutes

24th May

09:30 UK Retail Sales

25th May

09:30 UK GDP Growth

13:30 US Durable Goods Orders

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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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