Dollar Rate Today: GBP/USD Forecasters Uncertain on Next Moves, EUR/USD Powers Higher

Weakness is being expressed across the board this morning:

The pound dollar exchange rate is 0.18 pct higher on a day-to-day basis; GBP/USD is quoted at 1.6145 at 09:13 in London. The headline euro dollar exchange rate is meanwhile 0.16 pct higher at 1.3517.

The antipodean currencies are outperforming on Monday morning with AUD/USD half  percent up at 0.9417 and the NZD/USD up 0.7 pct at 0.8395.

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Forecasting better GBP/USD rates

The turnaround in fortunes for the pound dollar exchange rate over the course of the past week has been notable with many commentators choosing to be neutral on the pair this time last week.

This uncertainty was seen in the days leading up to the Bank of England's Inflation Report released on Wednesday which proved to be a major boon for the GBP.

Momentum is such that we are seeing more commentators backing GBP higher after the pair broker the important 1.6120 level overnight despite some soft house price numbers.

"We still favour GBP to the upside, but with few releases from the UK this week, GBP/USD looks likely to be mainly influenced by USD sentiment. 1.6160 should be the next area of resistance," says a note on GBP/USD from Lloyds Bank Research.

Bears losing control of the market

As mentioned, the pound dollar exchange rate is trading within the context of recent bearishness.

The charts do continue to suggest this state of affairs still exists, but that could be changing. Camilla Sutton at Scotiabank has taken a look at the charts and says:

"Most studies remain in bearish territory however some are showing early warnings of the bears losing control of the market. Spot is flirting with a near‐term break of the multi‐week downward trend line (currently comes in at 1.6091), a close above here would suggest near‐term buying pressure is building and would warn of a test up to 1.6200."

1.61 won't hold say UniCredit

Not everyone is bullish on the British pound. UniCredit Bank have not been known for their pro-GBP stance, even amidst the strong run of data releases through summer, and have this morning updated clients with the view that the 1.61 level will unlikely hold:

"BoE’s Martin Weale said that the strong GBP lowered inflation while also expressing discomfort with the recent GBP rise "worsening his concerns about the balance of payments." Given the latest weaker UK
data, cable will unlikely hold the line above 1.61."