GBP/USD Forecast – Will the USD’s Impressive Run Against GBP Continue?

The USD has made further gains this morning against Sterling, hitting 1.2803 at its high.

Despite the Pound finding some support around the 1.28 threshold, it has struggled to sustain any improvements against the Greenback of late.

It did threaten to make a move last week, when reports surfaced that the EU were on the verge of offering the UK a Brexit deal. Not for the first time these reports were quickly diluted, with the EU Commissioner Michel Barnier indicating that the UK’s current Brexit proposal was not satisfactory.

This has only fuelled speculation that UK PM Theresa May could be forced into having to alter her Chequers proposal, which she has consistently backed over recent weeks. The Pound has seen its value fall over recent days, due to the uncertainty these reports have created. It has fallen by over two cents from its highs last week, when it was trading back above 1.30.

Despite the USD receiving a boost due to the current lack of confidence in Sterling, it has also been supported around the current levels by a booming US economy. This has outperformed almost every expectation and surpassed every growth forecast since the turn of the year.

This positive outlook continued overnight with the Atlanta FED lifting its third quarter US Gross Domestic Product figure to 4.7%. Whilst this is not the official reading, it is still an impressive figure none the less.

Whilst the general market feeling is positive, there are those with varying opinions. St Louis Federal Reserve President James Bullard feels that the US economy will start to slow and that we may well see the end of its “winning streak”. He cited slowing Productivity figures as the reason for his prediction and will heed as a word of caution to any clients looking for further improvements for the USD.

For insight into the upcoming data releases and political developments with the potential to impact cable exchange rates please get in touch, you can reach me directly at [email protected].

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