Pound Sterling US Dollar Exchange Rate News: GBP/USD Slides to Five-Month Low as BoE Rate Odds Slashed by Weak Inflation Figures

Pound Sterling (GBP) Exchange Rates Nosedives as Inflation Comes up Short

Pound Sterling (GBP) exchange rates retreated against the majority of peers on Wednesday in the wake of some disappointing CPI figures.

The Office for National Statistics (ONS) reported inflation unexpectedly fell from 2.5% to 2.4% in April, striking its lowest level in over a year and pressuring Sterling sentiment.

The losses in GBP were then further extended as the session continued with the dip in inflation prompting markets to slash the chances the Bank of England (BoE) could still target a rate hike in 2018.

However Sterling exchange rates could rally later this morning should UK retail sales have rebounded in April, as expected.

GBP/EUR Exchange Rate Flat as Eurozone Data Disappoints

The Pound Euro (GBP/EUR) exchange rate remained flat on Wednesday, with some disappointing Eurozone data preventing the Euro (EUR) from exploiting the weakness in Sterling.

Data published by IHS Markit revealed the bloc’s private sector growth slid again in May, with both the Manufacturing and Services sectors slowing at a faster pace than expected and indicating the Eurozone’s period of explosive growth is well behind it.

Further denting the Euro exchange rate was an unexpected dip in the Eurozone’s consumer confidence index, which was shown to have slid from 0.4 to 0.2 this month.

GBP/USD Exchange Rate Plummets, but Fed Minutes Offer some Respite

The Pound US Dollar (GBP/USD) exchange rate fell to a new five-month low on Wednesday as investors continued to flock to the US currency.

However the US Dollar (USD) was forced to part with some of its gains towards the end of the day’s session following the publication of the minutes from the Federal Reserve’s most recent policy meeting.

While the minutes indicated another rate hike is likely in the immediate future, they were viewed as broadly dovish, with the Fed appearing willing to tolerate inflation remaining above-target for the time being.

GBP/CAD Exchange Rate Losses Capped by Trade Concerns

The Pound Canadian Dollar (GBP/CAD) exchange rate tumbled again during yesterday’s session, with the UK’s weaker-than-expected inflation figures dragging on the pairing.

However the Canadian Dollar (CAD) was prevented from making further gains as it was held back by comments from US President Donald Trump, in which he cast doubts over trade talks with China, reigniting fears of a possible trade war and pressuring the commodity correlated currencies such as the ‘Loonie’.

GBP/AUD Exchange Rate Gains Reversed by UK Inflation

The Pound Australian Dollar (GBP/AUD) exchange rate initially strengthened on Wednesday, as renewed geopolitical tensions saw investors shun the ‘Aussie’ (AUD).

However these gains were quickly relinquished following the broad-based fall in Sterling (GBP), with the AUD exchange rate also being lifted by the late downturn in USD.

GBP/NZD Exchange Rate Tumbles as USD Weakens

The Pound New Zealand Dollar (GBP/NZD) exchange rate fell by almost a cent during yesterday’s session, with the pairing telling a similar story to GBP/AUD.

Luke Trevail

Luke studied Journalism at university but quickly moved into the financial sector, initially working in retail banking before joining TorFX in 2007. As a Senior Account Manager Luke assists in overseeing the management of the company’s exposure to currency volatility. He uses his years of foreign exchange experience to produce regular news updates exploring the latest currency movements.

Contact Luke Trevail