Pound Sterling US Dollar Exchange Rate Live: GBP/USD Nosedives as UK Inflation Falls Short

GBP/USD Exchange Rate Plummets on Disappointing UK Inflation Figures

UPDATE 11:10 BST: The Pound Sterling US Dollar (GBP/USD) exchange rate continues to retreat this morning, with the pairing striking close to a two-week low as UK inflation came in below target.

The ONS reports UK inflation held at a one-year low of 2.4% in May, falling short of forecasts it would rise to 2.5%.

This has caused a considerable drag on the Pound (GBP) exchange rate this morning as it dampens expectations that the Bank of England (BoE) could still target a rate hike in 2018.

GBP/USD Exchange Rate on the Defensive as US Inflation Beats Expectations

UPDATE 16:11 BST: After rallying at the start of the day’s session, the Pound Sterling US Dollar (GBP/USD) exchange rate has been placed on the back foot this afternoon following the publication of the latest US inflation figures.

The data revealed US prices accelerated at their fastest pace in over five-years last month, as headline inflation shot up from 2.5% to 2.8%, outpacing forecasts of a more modest 2.7% rise.

GBP/USD Exchange Rate Advances as UK Employment Accelerates

UPDATE 11:41 BST: The Pound Sterling US Dollar (GBP/USD) exchange rate rallied this morning, as investors welcomed another uptick in the UK workforce last month, with UK employment striking a new record high.

However, slightly denting Sterling advance were the accompanying wage figures, which revealed wage growth unexpectedly falling back from 2.9% to 2.8% in May.

Meanwhile markets are bracing for a possible rebound in the US Dollar again later this afternoon as economists forecast today’s US CPI figures will reveal a strong lift in domestic inflation in May.

GBP/USD Rises Following Historic Summit Between US and North Korea and Decent UK Unemployment Figures

UPDATE 10:10 BST: The Pound has risen around 0.3% against the US Dollar (GBP/USD) this morning despite a successful and historic summit between US President Donald Trump and North Korean leader Kim Jong-un.

This also follows some mixed wage and earnings news out of the UK this morning, with unemployment standing at a 43-year low of 4.2%, and wage growth slipping slightly to 2.8% in May, down from 2.9% in April.

GBP/USD Exchange Rate Tumbles on Sluggish UK Economic Data Ahead of Latest UK Brexit Bill

The Pound US Dollar (GBP/USD) exchange rate remains on the back foot this afternoon as the pairing continues to be pressured by today’s weak economic data.

GBP investors are also skittish today on speculation the UK government could be handed another defeat in the Commons with its latest Brexit Withdrawal bill.

May is urging rebel Tories to back the bill, but it appears as though backbenchers will vote in support of a number of amendments made by the House of Lords aimed at softening the UK’s exit from the EU.

Pound Sterling (GBP) Exchange Rates Pulls Back as UK Production Figures Nosedive

After initially rising at the start of this week’s session, the Pound US Dollar (GBP/USD) exchange rate is now beating a hasty retreat following the release of the UK’s latest trade and production figures.

According to data published by the Office for National Statistics (ONS), the UK’s latest trade balance revealed the domestic trade deficit unexpectedly exploded from -£3.22bn to -£5.28bn in April.

However it is the accompanying industrial production figures which are likely to have had the most negative impact on Sterling sentiment this morning, as GBP investors reacted to a shock contraction in output.

Today’s figures revealed factory output growth plummeted from 0.1% to -0.8% over the same period, a significant departure from forecasts of a slight uptick to 0.2%, and causing the Pound to sink.

GBP/USD Exchange Rate Bolstered as Upbeat PMI Figures Bolster BoE Rate Expectations

Last week, the Pound US Dollar (GBP/USD) exchange rate continued to tick higher as Sterling was bolstered by some robust PMI figures as well as Hawkish comments from Bank of England (BoE) Deputy Dave Ramsden.

However it wasn’t all sunshine and rainbows for the Pound (GBP) exchange rate last week as Brexit reared its ugly head once more, with uncertainty rising as the EU’s Chief Brexit negotiator, Michel Barnier, expressing doubts over the UK’s backstop proposals.

Meanwhile the US Dollar (USD) struggled last week, despite some upbeat domestic data, with signs that the US currency’s dominant run could finally be coming to an end as US bond yields sink.

US Dollar (USD) in Spotlight as Markets Brace for Fed Rate Hike

Coming back to this week, movement in the US Dollar (USD) is muted at the start of this week’s session as markets brace for the Federal Reserve rate decision later in the week.

The Fed is overwhelmingly expected to vote to raise interest rates when its latest meeting concludes on Wednesday, with CME’s FedWatch tool currently placing the odds of a June hike at over 90%.

However with the hike almost guaranteed, and markets having already priced the decision in, the hike itself is unlikely to have much impact on the US Dollar this week.

Instead the focus for USD investors will be on the Fed’s forward guidance, with the US Dollar exchange rate potentially strengthening if the bank hints towards two additional rate hikes in 2018.

GBP/USD Exchange Rate Forecast: Uptick in UK Inflation to Bolster Sterling?

Looking ahead this week’s session could see some significant movement in the GBP/USD exchange rate, even discounting the Federal Reserve’s policy meeting on Wednesday.

In terms of UK data, the focus will be on the latest Consumer Price Index and employment figures as GBP investors attempt to discern whether the Bank of England (BoE) could potentially still target a rate hike later in the year.

This could see the Pound press higher in the first half of the week, especially if UK inflation is shown to have ticked up last month as forecast.

Meanwhile the US will publish its own CPI figures on Tuesday, with markets expecting the US Dollar to strengthen as economists forecast US inflation will have surged from 2.5% to 2.8% in May.

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