Pound Sterling risks breaking to fresh three-month lows against the Dollar if U.S. inflation beats expectations later today, but recent history suggests the U.S. currency tends to weaken following inflation releases.
Labour market figures show the U.S. economy continues to add jobs at a strong pace, although further signs of a slowdown were apparent in the August data released on September 01.
The Pound to Dollar exchange rate is looking to make it a third successive day of gains as upside momentum from a surprisingly soft U.S. data report extends, however, analysts say strength is ultimately likely to prove fleeting for the time being.
The Pound to Dollar exchange rate unwound much of an earlier rally heading into the weekend as financial markets appeared to contemplate what surprisingly strong producer price inflation in July could mean for the measure of inflation most closely watched by the Federal Reserve (Fed).
Pound Sterling traded higher against the U.S. Dollar following the release of data that showed U.S. inflationary pressures continued to ease in July, boosting market confidence that the Federal Reserve won't raise interest rates again in September.
The U.S. non-farm payroll report has shown a knack of consistently coming in above expectation over recent months, but August's provided a rare downside surprise that appears to have knocked the Dollar in the short-term.
"August dull? Rangebound trading? Not a chance," says Kenneth Broux, a strategist at Société Générale, referencing the shakeup in U.S. bond markets that has in turn fed into a stronger dollar.
Fitch Ratings' downgrade of one of America's credit ratings was widely dismissed as either a work of irrelevance or something founded on flawed analysis Wednesday but the same couldn't be said for countries and economies borrowing in foreign currencies.
The Pound to Dollar exchange rate extended losses toward landmark levels on the charts Tuesday when results of an influential survey told of a so far underwhelming rebound in the U.S. manufacturing sector for July but also indicated scope for a recovery in the months ahead.
The Pound to Dollar exchange rate stalled in an earlier rally in the final session of the week after data suggested the Federal Reserve (Fed) is close to reaching its inflation target and that consumer spending continues to outpace income growth in the U.S. against the backdrop of a seemingly brightening picture in Europe.
Goldman Sachs has lowered the odds the U.S. will fall into recession saying the disinflation process can continue without the need for a more material economic slowdown.
The U.S. is now likely to pull off the perfect 'soft landing' as it the economy will likely avoid recession, according to deVere Group.
The Dollar fell after U.S. inflation figures came in below expectations and further eased pressure on the U.S. Federal Reserve to raise interest rates beyond July's anticipated hike.
The Pound to Dollar exchange rate was notably higher after a key U.S. jobs report undershot against market expectations prompting an easing in Federal Reserve rate hike expectations.
The Pound to Dollar exchange rate (GBPUSD) relinquished a strong daily advance following the release of a string of stronger-than-expected data that confirmed to markets there was little room for the Federal Reserve to end its rate hiking cycle.
A host of above-consensus economic data releases has boosted U.S. bond yields and the Dollar as investors position for further Federal Reserve rate hikes.
The Dollar was sold after official figures confirmed U.S. inflation is falling sharply amidst an ongoing decline in the price of energy and a broader easing of price pressures, opening the door for the Federal Reserve to keep interest rates unchanged on Wednesday.
As the United States edges closer to the summer months, price pressures are easing across several dominant sectors, namely food, utilities, healthcare, and apparel, according to Truflation.
The Pound to Dollar exchange rate put in a strong show through the course of morning New York trade with the pair rising to 1.25 again.
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