November 28, 2024 – Written by Tim Boyer
STORY LINK Pound US Dollar Exchange Rate Leaps Higher
The Pound US Dollar exchange rate jumped on Wednesday following the publication of several important US data releases.
At the time of writing, GBP/USD was trading at approximately $1.2640, up roughly 0.6% from the start of Wednesday’s session.
US Dollar (USD) Plummets following Domestic Data
The US Dollar (USD) slumped against most of its counterparts on Wednesday, dropping by over 1% against the New Zealand Dollar (NZD) and the Japanese Yen (JPY), following a wave of domestic economic data releases.
Among the data, October’s durable goods orders rose by 0.2%, falling short of the expected 0.5% increase.
Preliminary GDP data for the third quarter matched initial estimates of 2.8%, while initial jobless claims also came in below forecasts.
The latest core PCE price index, the Federal Reserve’s preferred inflation gauge, met market expectations at 2.8%, potentially curbing further USD losses.
Despite this, the flurry of domestic data releases sent USD exchange rates reeling, with the ‘Greenback’ weakening against most of its peers during the latter half of Wednesday’s trading session.
Pound (GBP) Unclear amid Economic Uncertainty
The Pound (GBP) had a varied trading session on Wednesday, fluctuating without clear direction due to the absence of domestic data releases and ongoing concerns about the UK’s economic future.
On Tuesday, President-Elect Donald Trump revealed plans to impose a 25% tariff on goods from Canada and Mexico, raising concerns about potential negative effects on the British economy and weakening the Pound’s performance.
Commenting on the possible consequences in the wake of Trump’s comments, Bank of England (BoE) official Claire Lombardelli said:
’I don’t want to speculate on the specifics, but we know barriers to trade are not a good thing, whether they are tariffs or regulatory or others.’
GBP/USD Exchange Rate Forecast: Risk Dynamics in the Spotlight
Looking forward, the main driver of the Pound US Dollar exchange rate as we head into Thursday is expected to be the market appetite for risk, given the lack of economic data releases from both the UK and US.
If markets adopt a cautious approach, we may see GBP/USD exchange rates slide.
Conversely, if markets resume the positive trading conditions seen on Tuesday, GBP/USD could start to strengthen towards the end of the week.
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TAGS: Pound Dollar Forecasts
