The best GBP to USD exchange rate has shown some growth after the low points last week. As of now, the currency pair stands around the 1.22 price point, stabilising somewhat. The original loss in value was largely due to the increasing worldwide geopolitical tensions. Specifically, the situation surrounding Israel and Hamas. However, the promised siege has been delayed for over 2 weeks now. It seems as though traders have calmed down. We can also see the mood around markets improve.
Additionally, Treasury bonds have decreased in the US, further demonstrating investor confidence. Currently, the best GBP to USD exchange rate is around 1.2251, going up 0.73%. This means that 100 GBP to USD would be $122.36 at the moment.
With the improvement in stock performance, we also see the US dollar lower. The US currency is down 0.55%, according to the US Dollar Index.
There are also indicators for the US economy’s future performance. The CFNAI, for example, is at 0.02, which is not as high as the 0.05 expectation. Nonetheless, it still outstrips the previous month’s rating of -0.22 by a wide margin. This indicates a positive trend for the US economy, as some Fed officials in Chicago have stated. If we were to expect a recession to come soon, we would likely see the CFNAI at around -0.7 for the 3-month average. The effect on the dollar would have further impacts on the best GBP to USD exchange rate.
The next indicators for the direction of the US economy would be the upcoming GDP and core PCE numbers. The PCE would give strong indications of the Fed’s intentions for further plans for interest rates.
The UK is, of course, the other side of this story. We should soon see new data from the UK’s ONS office that would give indications on employment in the country. However, this new data would not give indications for inflation. Upcoming PMI data could also plausibly boost the pound into a stable position for the time being, having implications for the GBP to USD forecast for 2023.
