GBP to USD Exchange Rate Outlook: Sterling Underpinned by Positive Market Mood

November 25, 2024 - Written by John Cameron

STORY LINK GBP to USD Exchange Rate Outlook: Sterling Underpinned by Positive Market Mood

The Pound US Dollar exchange rate edged higher at the start of the week, bolstered by Monday’s risk-on market mood.

At the time of writing, GBP/USD was trading at approximately $1.2568, up roughly 0.3% from the start of Monday’s session.

The Pound (GBP) kicked off the week with a robust performance against most other currencies, despite the absence of domestic economic data influencing its trajectory.

This upward trend was primarily fuelled by investors' heightened appetite for risk, as they opted for riskier assets over safer ones.

Given the Pound's growing responsiveness to risk sentiment, this market shift played in its favour, bolstering GBP exchange rates against its safer currencies

The US Dollar (USD) fluctuated against most currencies on Monday, remaining subdued against its safe-haven counterparts while sliding against riskier ones as the absence of US data releases at the week's start left the currency exposed to market risk
appetite.

Typically, the USD gains from uncertain or cautious trading environments, given its safe-haven status.

However, Monday's investor preference for riskier assets over the safe haven 'Greenback' put the US Dollar on the defensive throughout most of Monday's European trading session.

GBP/USD Exchange Rate Forecast: UK and US Data to Drive Movement

Looking forward, the main driver of movement for the Pound US Dollar exchange rate as we head into Tuesday is expected to be economic data releases scheduled from both the UK and the US.

For the Pound, the UK's upcoming CBI distributive trades survey for November could exert downward pressure on Sterling if it confirms a further decline, this time from -6 to -14.

Meanwhile, the US will release its latest CB consumer confidence index, which could bolster the ‘Greenback' if the data indicates a rise in consumer morale this month.

However, the GBP/USD exchange rate could also continue to be influenced by market appetite for risk.

Should markets remain cheery, GBP/USD could continue to strengthen. However, should markets turn cautious instead, GBP/USD could relinquish the bulk of its gains.

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TAGS: Pound Dollar Forecasts