ExchangeRates.org.uk - At the time of writing the GBP/USD was trading at around $1.3367, down roughly 0.4% from Wednesday’s opening levels. The pound (GBP) struggled to garner investor attention on Wednesday and lost ground against the majority of its peers as a return to downbeat trade undermined Sterling sentiment. The Pound was no longer supported by the upbeat trading conditions that swept markets at the start of the week following the People’s Bank of China’s (PBoC) announcement of its largest round of stimulus measures aimed to boost the Chinese economy since Covid-19. On Wednesday, optimism around these measures began to dwindle on the premise that they were overdone, which saw markets do a 180 and opt for safer assets instead, hobbling GBP exchange rates.
US Dollar (USD) Supported by a Return to Risk-off Flows
The US Dollar (USD) climbed against the majority of its peers on Wednesday as markets returned to cautious trading conditions, underpinning the safe-haven ‘Greenback’. Thanks to fading support in China’s new economic boosting measures on Wednesday, USD managed to regain ground following a lacklustre start to the week. Pushing markets further away from riskier assets and closer towards safe-haven currencies such as the US Dollar were escalating tensions in the Middle East, as Israel intensified its attack on Lebanon.
GBP/USD Exchange Rate Forecast: US Data to Drive Movement
Looking ahead, the primary catalyst of movement for the Pound US Dollar exchange rate looking forward to Thursday will likely be several economic releases from the US. The finalised US GPD reading for the second quarter of the year could offer the ‘Greenback’ some modest support should the data match expectations. However, with the latest durable goods orders forecast to plunge alongside an expected downturn in the latest initial jobless claims, will this cap any potential USD gains? Turning to the Pound, UK data will be few and far between for the remainder of the week, which will likely see GBP exchange rates trade in line with risk dynamics. Should Wednesday’s anxious mood prevail, Sterling could remain on the back foot against its peers.
This content was originally published on ExchangeRates.org.uk
