GBP/USD Exchange Rate Rangebound, Brexit Weighs on UK Industry
The Pound US Dollar (GBP/USD) exchange rate held steady today, with the pairing currently trading around $1.313 after this morning’s release of the UK new car sales figure for November, which fell by -1.3%.
After yesterday’s gains against the US Dollar, today’s vehicle sales figure has subdued market confidence in the Pound as economic realities kick-in ahead of the 12th December general election.
Ian Plummer, Commercial Director at Auto Trader, commented:
‘Brexit continue[s] to hinder the industry too; the unsteady value of the pound, consumer uncertainty and the ambiguity around future trading regulations only serve to amplify the enormous pressure manufacturers are under.’
The Conservative Party have continued to maintain their lead in the opinion polls, however, which is continuing to buoy investor’s hopes in Sterling.
Jim Reid, an analyst at Deutsche Bank, said:
‘Sterling has been supported by investor hopes that a Conservative majority at the election will support a smooth ratification of the Withdrawal Agreement through Parliament, taking away some of the short-term uncertainty over the Brexit process.’
USD/GBP Exchange Rate Holds Steady, US Jobs Data in Focus
The US Dollar (USD) held steady against many of its competitors today after markets shrugged off yesterday’s weaker-than-expected US economic data, with the ADP employment figure and the ISM non-manufacturing reports both undershooting expectations.
The ongoing uncertainty around US-China trade relations has, however, continued to buoy the safe-haven appeal in the ‘Greenback’ today.
Kyle Rodda, an analyst at IG Markets, commented:
‘The markets feel like trade talks are on a shot-clock now: December 15 being when the buzzer blows. Anything that remotely stands in the way of a deal getting done by then will be reacted to with anxiety.’
In US economic news, today will see the release of the US continuing jobless claims figure for November, which is expected to rise from 1.64 million to 1.65 million.
Today will also see the release of the US trade balance figure for October, which is expected to sink from $-52.5 billion to $-48.7 billion.
Today’s economic data could drag down the US Dollar if they ignite concerns for the US economy which, due to a slowing economy, could begin to show signs of strain over the next few months.
GBP/USD Outlook: Could Rising US Nonfarm Payrolls Buoy the ‘Greenback’?
US Dollar investors will be looking ahead to tomorrow’s publication of November’s US nonfarm payrolls figure, which is expected to rise from 128 thousand to 180 thousand.
Tomorrow will also see the publication of the flash US Michigan consumer sentiment index for December, which is expected to ease slightly from 96.8 to 96.5.
These reports could buoy confidence in the ‘Greenback’ as the American economy shows signs of improvement.
Meanwhile, British political developments will continue to drive the GBP/USD exchange rate this week, with any signs of the Labour Party narrowing their position with the Tories in the opinion polls likely to prove Pound-negative.