Pound US Dollar (GBP/USD) Exchange Rate Ticks Lower on Lull in Data
The Pound US Dollar (GBP/USD) exchange rate is trending lower this morning, as a lack of market-moving data leaves the pairing exposed to a souring market mood.
At the time of writing, GBP/USD is trading at $1.2703, down marginally from this morning’s opening rate after bouncing off a low of $1.2673.
Pound (GBP) Dips as UK Data in Short Supply
The Pound (GBP) is on the back foot today, trading lower against many of its peers.
The downside comes as market-moving data is thin on the ground for the Pound today, leaving Sterling to trade on market mood alone.
A cautious mood has swept the markets this morning, undermining the increasingly risk-sensitive UK currency.
However, Sterling is resisting steeper losses. This is perhaps due to last week’s upbeat economic data, including a far stronger-than-expected services PMI on Thursday, which seems to still be lending GBP support.
US Dollar (USD) Bolstered by Souring Market Mood
The US Dollar (USD) is wavering higher today, as a decline in risk appetite takes control of markets, lifting the safe-haven currency.
The gloomy mood comes as tensions in the Middle East continue to mount, raising fears of a wider escalation in tension.
Worries of a growing conflict have ramped up in recent days as Israel has increased its airstrikes on Lebanon. Meanwhile, mounting tensions in the Red Sea are leading to fears of disrupted global trade and an escalation.
With the growing risk of an escalating conflict in the Middle East, market risk appetite is weak.
GBP/USD Exchange Rate Forecast: Risk Aversion to Continue to Undermine the Pairing?
Looking ahead, the GBP/USD exchange rate could be infused with volatility this week, as a lack of market-moving data could continue to hobble the pairing.
Turning to the Pound, the theme of minimal data will continue for the majority of the trading week. Only on Friday can we expect November’s GDP report to be published.
October’s reading printed at -0.3%, however November’s data is expected to show a rise of 0.2%. If the data matches or beats expectations, this could lend Sterling support in the latter stages of the week.
Similar to the Pound, across the Atlantic a limited amount of data could also leave the US Dollar somewhat muted through the first half of the week. However, should market sentiment remain downbeat this week, this could continue to underpin the safe-haven ‘Greenback’.
On Thursday, US core and headline inflation are set for release. Core inflation is expected to fall from 4% to 3.8%, whilst headline inflation is expected to slightly rise, from 3.1% up to 3.2%. If the data prints as expected, the mixed readings could see the US Dollar wobble towards the end of the trading week.
On Friday, the most recent US PPI will also be released. November’s reading printed at 0%, showing stagnated growth. However, forecasters are predicting a slight rise in December’s figure, up to 0.1%. Should the results print as predicted, this could help the US Dollar firm on Friday.