Pound US Dollar (GBP/USD) Exchange Rate Rises despite Slowing UK Housing Market
This Pound US Dollar (GBP/USD) exchange rate has risen by 0.3% today, to trade in the region of $1.2932.
The GBP/USD exchange rate is now well up on last week’s lows, having recovered much of its lost ground on Friday when UK retail sales data smashed forecasts.
Today remains quiet on the data front, with US markets closed for Presidents Day and only the Rightmove House Price Index released for the UK.
Rightmove said that prices for newly advertised properties had only increased by 0.2% in February compared to the previous year.
Over the past year, asking prices rose by the least in a decade, indicating that the housing market is slowing ahead of the UK’s departure from the European Union.
However, in light of the recent increase in wage growth, this also means that the affordability of housing has improved at the fastest rate since 2011.
GBP/USD Gains as Global Risk Sentiment Improves
While the GBP/USD exchange rate has edged higher today, the US Dollar has garnered some support from increased demand for safe-haven currencies ahead of the continuation of US-China trade discussions in Washington.
Over the weekend, official reports from the White House suggested that while progress had been made in Beijing, ‘much work remains’.
US President Donald Trump said during a White House news conference that they were closer than ever before to ‘having a real trade deal’ and he would be ‘honoured’ to remove tariffs if an agreement can be reached.
Global risk appetite was also slightly improved by another reiteration of Trump’s suggestion that the 1 March deadline could be extended.
On Sunday, the President said that ‘big progress’ is being made between the US and China on ‘so many different fronts.’
GBP/USD Outlook: Will Sterling Rise on Wage Growth?
Tuesday is set to be a livelier day in terms of economic data releases, with the Pound US Dollar (GBP/USD) exchange rate likely to rise if UK employment data matches forecasts.
The ILO unemployment rate is forecast to remain steady at 4%, a result which could lend the Pound support.
The Pound may also advance in reaction to an expected increase in UK average earnings, both including and excluding bonuses.
As there is an absence of notable US data, the focus is likely going to remain on the continuation of US-China trade discussions in Washington.
The ‘Greenback’ may slip against GBP if there are signs of progress made between US and Chinese officials, as rising global risk sentiment could see investors pull out of the safe-haven USD.