GBP/USD Exchange Rate Steadies as Geopolitical Storm Calms
Following a busy week for the Pound US Dollar (GBP/USD) exchange rate, the pairing is trading in a narrow margin today.
Last week saw substantial losses in GBP value relative to USD as a combination of Brexit jitters and the US-China trade war saw investors flock to the safe haven of the ‘Greenback’.
The week ahead may see less severe fluctuations than those seen last week, as markets come to terms with the overarching geopolitical situation.
Pound (GBP) Exchange Rates Muted following New GDP Data
The Pound (GBP) failed to gain traction on Friday with the publication of the UK’s latest GDP figures, despite showing some growth in the second quarter.
The GDP was up 0.4% from 0.2% in the first quarter, but this progress proved too slight to give Sterling some forward momentum against its peers.
Any possibility of GBP appreciation from this GDP growth was perhaps also stunted by the UK’s latest manufacturing figures, which showed a decrease in factory orders.
In the absence of any new data today and with no-deal Brexit fears having cooled somewhat, the Pound is trading narrowly with the majority of its peers.
US Dollar (USD) Exchange Rates Stable following Last Week’s Boost
After reaching its highest exchange rates in 14 months last Friday, the US Dollar (USD) is failing to further its gains against GBP today, with ‘Greenback’ investors having already sheltered behind the safe haven currency and seemingly awaiting further US-China and Turkey developments.
Like the UK, the US is not publishing any major data today which could see the GBP/USD exchange rate continue to trade narrowly throughout the session.
Pound US Dollar (GBP/USD) Exchange Rate Forecast: Unemployment and Inflation Figures to Drive Sterling Demand?
The Pound US Dollar (GBP/USD) exchange rate may see its first movement on Tuesday with the publication of the UK’s employment figures.
The unemployment rate is expected to remain at 4.2%, but movement here could see the Pound impacted in either direction.
GBP also has a chance to gain ground on Wednesday with the latest inflation figures, with yearly growth expected to grow to 2.5% from 2.4%, which could boost ‘Sterling’ value.
On the other side of the pairing, the US Dollar may be impacted by domestic retail sales for July which are due to be published on Wednesday.
These are largely expected to show a decrease to 0.1%, which may devalue the ‘Greenback’.
Otherwise, the ongoing financial crisis in Turkey may continue to drive demand for USD, as may the trade war between the US and China, while GBP will be affected domestically by any major Brexit news.
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TAGS: Daily Currency Updates Pound Dollar Forecasts