USD-GBP Exchange Rate is a Clash of the Titans as UK and US GDP Results Loom

USD Confidence Remains Middling despite Advantage against GBP

The US Dollar has seen a rapid rise against the Pound Sterling this week as in the aftermath of Monday’s stock market mayhem, but the ‘Buck’ has only risen overall against ‘stable’ competitors like the Euro and the Pound.

The US Dollar’s losses against the Pound were relatively small compared to the disasters that hit other currencies between Monday and Tuesday; while most currencies saw a near-vertical dive from the daily high into a historically low valley, the descent of the ‘Greenback’ was more gentle, falling from 0.6395 down to 0.6328 as the worst of its losses in the pairing. Since then, the US Dollar has risen exponentially against the Pound, climbing up to a plateau of 0.6374 yesterday before powering ahead and establishing a peak of 0.6476 today. This rising recovery did not meet entirely with the expected state of play, however. The release of the US Consumer Confidence Score for August saw a whopping 10.6 point increase to 101.5 up from 90.9, but this result did not cause any clear upward spikes in the US Dollar’s performance.

Despite its progress against the Pound, the US Dollar has failed to repeat the performance in the pairings it should be excelling in, namely commodity currencies. The US Dollar has declined against the Australian Dollar, the Canadian Dollar, the Norwegian Krone and the New Zealand Dollar today; given that the US Durable Goods Orders for August came in with a 2% increase against the -0.4% predicted decrease, this outcome is a clear indicator that the ripples caused by ‘Black Monday’ have yet to fully subside.

USD-GBP Conversion Rate Stands to Further Gains Today if US Results show Best Possible Outcome

The US Dollar can be expected to extend its current gains against the Pound Sterling today, although tomorrow is a less clear picture. The release of the US Q2 GDP is due later today and forecasts are for a healthy rise over the previous results. The Q2 Personal Consumption figures are also due in and predictions have been similarly optimistic for these.

Tomorrow, however, the US Dollar may meet its match when the UK Q2 GDP results are announced. Forecasts have been for rises in the figures and anything that exceeds expectations will do nothing if not inspire confidence in the UK economy. Several major US releases are due later on, but the outcome of an earlier event may put a definite dampener on USD confidence.

The Jackson Hole Symposium, an annual gathering of Federal Reserve members and other international banking officials is being held tomorrow and given the historic influence of the event, any optimistic or pessimistic statements by speakers will be closely scrutinised by speculators. Even before it has begun, the Symposium is not off to the best of starts; a number of Fed members will not be in attendance, including Federal Reserve Chair Janet Yellen. Further absences will likely degrade confidence in the ‘Buck’ and any further developments from the Wyoming lakeside will be listened to with great attention.