US dollar Forecast: US GDP data and the impact on pound vs dollar rates

GBP EUR Lower After Rishi Sunak Autumn Budget

The US dollar has continued to go from strength to strength recently owing to a number of strong data releases recently. It has also been used as the safe haven of choice caused by the concerns of a potential global slowdown. The US dollar is often used as a safe haven currency and in times of geopolitical uncertainty it will often strengthen against the pound.

During yesterday’s trading session the US dollar improved once again after data confirmed that orders for US made goods increased by their biggest amount in the last 8 months and this helped the Greenback.

This has given some support to the US Federal Reserve (Fed) to consider when to raise interest rates; if the economy continues to show signs of growth this will allow the Central Bank to consider increasing rates.

Later this afternoon the US will release the latest set of Gross Domestic Product (GDP) figures for the first quarter with annualized growth expected to show an increase of 2.1%.

Therefore, any change to the expectation could result in a lot of volatility as we end the week, so if you’re considering making a US dollar transfer then make sure you keep a close eye out on the release.

There are a number of analysts who expect GDP to break past the expected figure as net exports have been rising as well as an improvement in the housing sector recently.

Since the start of the year the Federal Reserve have been rather cautious in their tone towards raising interest rates further from their current levels but an improvement in Gross Domestic Product (GDP) combined with a number of positive data releases recently could lead to further US Dollar strength if the Fed hint that another interest rate hike may be coming in the near future.

If you would like to discuss the factors that could impact your currency exchange, feel free to get in touch. I’ll be happy to respond personally and discuss your requirements.