GBP/USD Exchange Rate Rangebound as Trump Vows to ‘Decouple’ US-China Economies
The Pound to US Dollar (GBP/USD) exchange rate held steady today, with the pairing currently fluctuating around $1.302.
The US Dollar (USD) has continued to benefit from US President Donald Trump’s vow to scale back US-China economic ties.
Consequently, the safe-haven ‘Greenback’ has benefited from concerns over a possible ‘decoupling’ between the world’s two largest economies.
Mr Trump said at Monday’s White House news conference:
‘We’ll manufacture our critical manufacturing supplies in the United States, we’ll create ‘made in America’ tax credits and bring our jobs back to the United States and we’ll impose tariffs on companies that desert America to create jobs in China and other countries.’
In US economic news, today will see the release of the latest Initial Jobless Claims report for September. If these continue to drop, however, we could see the ‘Greenback’ edge higher.
However, if US-China trade tensions continue to worsen, then we could see the USD/GBP exchange rate edge higher.
Pound (GBP) Rangebound as Brexit Woes Weigh on Sterling
The Pound (GBP) remained subdued today after the European Commission’s President, Ursula von der Leyen, said Downing Street’s U-Turn on the Brexit Withdrawal Agreement were damaging to UK-EU relations.
Former Justice Secretary David Gauke commented:
‘Any attempt to backslide from the commitments made in the Northern Ireland protocol would be seen as an act of bad faith by the EU and the wider world. It would undermine trust and likely result not just in no deal, but an acrimonious no deal.’
GBP investors have become increasingly concerned after Prime Minister Boris Johnson announced a new ‘rule of six’ to apply from Monday. gatherings will be limited to just 6-people to curb the spread of Covid-19.
However, pubs and restaurants will suffer because of the new guidelines. As a result, this has left many Pound investors worried that the UK economy could suffer as we head towards the end of the year.
Chief Medical Advisor to the UK Government Chris Witty commented that ‘between now and spring is going to be difficult’.
GBP/USD Forecast: Could No-Deal Brexit Fears Drag Down Sterling Ahead of the Weekend?
US Dollar (USD) investors will be eyeing tomorrow’s release of the latest US Consumer Price Index for August. Any signs that the American economy is improving could provide a further boost to the ‘Greenback’.
Pound (GBP) traders will be looking to tomorrow’s releases of the UK Manufacturing and Industrial Production data for July. If this improves, then we could see Sterling pick-up on renewed hopes for the British economy.
The GBP/USD exchange rate will remain subdued for the rest of this week, with concerns growing over the possibility of a no-deal Brexit on December 31st.