December 20, 2024 – Written by Frank Davies
STORY LINK Pound US Dollar Exchange Rate (GBP/USD) Firms following BoE and US Data
The Pound to Dollar exchange rate (GBP/USD) edged higher on Thursday following the publication of the Bank of England’s (BoE) December interest rate decision and the US’s latest GDP data and initial jobless claims survey.
On Thursday, the Pound (GBP) lost ground against most of its major trading partners following the publication of the Bank of England’s latest interest rate decision.
As expected, the central bank kept interest rates at 4.75%.
However, the decision was not as unanimous as many had predicted, with three out of nine Monetary Policy Committee members advocating for a rate cut to 4.5%.
This unexpected split within the committee led to a significant decline in the Pound against nearly all major currencies, despite the widespread anticipation of a rate hold.
On Thursday, the US Dollar (USD) weakened against most of its major counterparts following the release of two key economic data points from the US.
First, the latest GDP figures surpassed market expectations, increasing from 3% to 3.1% instead of the anticipated decline to 2.8%.
However, the initial jobless claims for the second week of December fell well below forecasts, causing the ‘Greenback’ to face significant pressure during the latter part of Thursday’s European trading session.
As we move into Friday, the key drivers for the Pound Euro exchange rate will be the release of economic data from both the UK and the US.
The UK is set to unveil its latest retail sales figures, with expectations pointing to a significant rebound from the previous -0.7% to a 0.5% increase.
This positive shift could provide a strong boost to the GBP, helping it close the week on a high note.
Meanwhile, the US will publish its November core PCE price index, which is also anticipated to show a slight uptick.
This could attract buyers to the US dollar, known as the ‘Greenback,’ as the week comes to an end.
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TAGS: Pound Dollar Forecasts
