GBP/USD Exchange Rate Flat, US Dollar Could Rise on Improved Growth Figures
The Pound US Dollar (GBP/USD) exchange rate held steady today and is currently trading around $1.269 on the interbank market.
The US Dollar (USD) stabilised against the Pound (GBP) as ‘Greenback’ traders are bracing for tomorrow’s G20 summit in Japan, where President Donald Trump will meet his Chinese counterpart, Xi Jinping to discuss trade.
Yesterday saw US Treasury Secretary Steven Mnuchin comment:
‘We were about 90% of the way there [with a deal] and I think there’s a path to complete this.’
This has become a cause for optimism for many USD traders, as tensions between the two superpowers were beginning to weigh on the US economy.
If the two sides come to an agreement, however, the US Dollar could weaken as traders would flock to riskier currencies.
Conversely, the US Dollar would benefit from its safe-haven currencies, as traders would flee from riskier assets.
Today will see a slew of US economic data, with traders awaiting the US growth figures for the first-quarter. Any signs of improvement would uplift the USD/GBP exchange rate.
These will be followed by the US initial jobless claims figures for June which, however, are expected to increase.
GBP/USD Exchange Rate Steadies as Boris Johnson Says No-Deal a ‘Million-to-One’
The Pound (GBP) held steady today following comments from Boris Johnson, the former London Mayor and current Tory leadership favourite, which indicated an easing on his hard-Brexit stance.
Mr Johnson said:
‘It is absolutely vital that we prepare for a no-deal Brexit if we are going to get a deal. But I don’t think that is where we are going to end up – I think it is a million-to-one against – but it is vital that we prepare.’
This has provided some relief for Sterling traders who were becoming worried that the UK was becoming increasingly likely to face a no-deal exit from the European Union.
Japan’s Foreign Minister, Tarō Kōno, has also urged the next British Prime Minister to avoid a no-deal.
‘There are over 1,000 Japanese companies operating in the United Kingdom, so we are very concerned with this no-deal Brexit.’
With a lack of UK economic data today, Sterling has been driven by political developments surrounding the Tory leadership race and Brexit discussions.
As both potential Tory leaders are facing increasing pressure to avoid the UK’s chaotic exit from the European Union on 31 October, this has eased market jitters.
GBP/USD Outlook: G20 Summit in Spotlight
Sterling traders will be looking ahead to tomorrow’s UK growth figures for the first quarter.
An uptick could see the Pound increase on buoyed economic sentiment.
Tomorrow will also see the printing of the UK GfK consumer confidence figures for Jun, which, however, are expected to ease.
US Dollar investors, meanwhile, will be awaiting tomorrow’s Chicago Purchasing Managers’ Index figures for June.
US Personal Spending figures for May, however, are expected to improve.
The Pound US Dollar (GBP/USD) exchange rate will be driven by political developments tomorrow, with the G20 summit in Japan remaining in focus.