- GBP mixed on domestic situation – Abysmal decline in construction before ‘Brexit’
- Chancellor plans to slash corporation tax – Investment in UK seen as top priority
- Independence Day leaves US ecostats lacking – Dollar has mixed faring on national holiday
- UK services stats and BoE news out tomorrow – US to bring pair of orders announcements
The Pound has trended tightly against the US Dollar for the most part today, with investor optimism being one of the few things keeping the UK currency afloat.
The US Dollar has been divided against its peers, with the occurrence of Independence Day curbing economic activity for the nation until tomorrow.
UK Economic News: Sterling makes Limited Gains on Previous BoE Comments
The Pound has been an unstable option at the start of the week, with initial optimism quickly giving way to severe doubts about the future viability of Sterling versus its peers.
As one of the few positive influences on the UK currency of late, the fact that Bank of England (BoE) Governor Mark Carney was vocal about near-term stimulus measures bolstered the Pound somewhat. This was due to the fact that, while the situation for the UK economy seemed somewhat dire, the evidence of a guiding hand in transitioning the nation’s finances could only be regarded as positive news.
Less supportively, however, have been Monday’s economic announcements. Opening off the day’s news has been the announcement from Chancellor George Osborne that UK corporation tax will be cut to below 15%, in an effort to attract investors to the country in the wake of an instability-inducing ‘Brexit’. The move is a high-risk one, especially at the present time, as explained by Shadow Chancellor John McDonnell, who stated that:
‘I don’t think it sends the right message to those countries that wish to establish a co-operative relationship with us in the future, so that we get some of the benefits we had in the EU, even though we’re outside of it’.
In other news, the UK construction PMI for June fell alarmingly from 51.2 to 46, though given that ‘Brexit’ caused this drying up of support, it may be that worse is still to come from August onwards when July’s post-‘Brexit’ results begin to come in.
The Pound has trended in a tight range against the US Dollar (GBP/USD) today, with other movements including a loss of -0.4% against the Russian Ruble (GBP/RUB) and a gain of 0.4% against the Polish Zloty (GBP/PLN).
US Dollar Mixed on 240th Independence Day Celebrations
The US Dollar has been a mixed option so far today, with losses edging out gains overall. Among these shifts against peers has been a narrow movement against the Pound (USD/GBP), an advance of 0.4% against the Polish Zloty (USD/PLN) and a sizable loss of -0.6% against the New Zealand Dollar (USD/NZD).
There are no forecast economic announcements from the US today, on account of the 240th anniversary celebrations of the signing of the Declaration of Independence, which separated the then-Thirteen Colonies of the Kingdom of Great Britain into a new nation, the United States.
While most of the population is celebrating this historic occasion, economists remain wary about future US economic movements, especially as the ultimate impact of ‘Brexit’ on the US has yet to be determined.
Future GBP, USD Forecast: UK Services Stats and US Fed Speech due Tomorrow
Tomorrow will bring a number of ecostats from both sides of the pairing, though the UK’s contributions are expected to be less numerous than those from the US.
For the Pound, influence could be had by the optimistically-forecast UK services PMI for June, as well as the BoE financial stability report, which is due shortly afterwards.
From the US, the afternoon will bring factory and durable goods orders results for May, which have negative predictions assigned in both fields.
Closing off the day’s movement will be a speech from Fed official William Dudley, who is a voting member of the Federal Open Market Committee (FOMC).
Current GBP, USD Exchange Rates
The Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.3280 and the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.7531 today.
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