The Pound slipped against the US Dollar (GBP/USD) on Tuesday after the latest US Advance Retail Sales number was revised higher in March. The April figure fell in line with forecasts at 0.3%, but the March figure was positively adjusted to 0.8%.
Economist James Knightly commented:
‘Employment is rising, wages are growing and tax cuts means there is more cash in people’s pockets. With consumer confidence at strong levels, consumer spending growth is a key factor behind our above consensus 3% GDP growth forecast for the US this year. In turn, this leads us to look for a further three Federal Reserve rate rises in 2018.’
US Dollar (USD) Exchange Rate Forecast
The US Dollar has a few more opportunities to move on economic data this week, including Wednesday’s Housing Starts, Building Permits, Industrial Production, and Manufacturing Production ecostats on Wednesday. Economists expect Building Permits will contract in April on the month, by -2.3% after March’s 2.5% reading. Meanwhile, Manufacturing Production is expected to pick up in April by 0.5%, while Industrial Production is expected to increase by 0.6%.
However, there could be some other developments which impact the US Dollar this week. US President Donald Trump’s trade tensions with China are spreading some seeds of doubt in markets; the US stock market fell today on the concerns.
Meanwhile, the revised Advance Retail Sales number has taken some attention away from oil’s rally. Brent crude has hit fresh three-and-a-half-year highs of $79.47 per barrel; analysts have suggested that the $80 mark may be within reach, but now some are revising their forecasts to say prices could jump as high as $100.
Canadian Dollar (CAD) Exchange Rate Forecast
Crude prices have been on the rise of late since Washington announced it would be pulling the US out of the Iran nuclear deal. As Iran is the world’s fifth-largest producer of oil, disruptions with the deal could create less black gold in the market. The Canadian Dollar exchange rate hasn’t been able to capitalise on the rise in oil as the US Dollar rallies, and Canadian Existing Home Sales sink. The April figure came in at -2.9%, Economists had anticipated a much smaller 0.4% increase after March’s 1.3% growth.
The Pound to US Dollar (GBP/USD) exchange rate is trending at levels of 1.3474. The Pound to Canadian Dollar (GBP/CAD) exchange rate is trading at levels of 1.7379.