USD/GBP Exchange Rate Rises as US Safe-Haven Status Increases Following Sliding Eurozone Economy
The US Dollar Pound (USD/GBP) exchange rate is up today and is currently trading around £0.7748 on the inter-bank market.
The US Dollar (USD) gained against the Pound (GBP) as traders fled to the safe-haven status of the USD as its rival currency, the Euro, came under increasing pressure with the Eurozone economy showing signs of slowing down.
USD traders, however, are remaining cautious as the divide between the White House and the House of Representatives shows no signs of abating over funding for the controversial Mexican border wall.
Meanwhile, the Chair of the Federal Reserve Jerome Powell failed to make any substantial comments on monetary policy or the US economy in his latest speech last night – leaving many USD investors relieved amid recent political tensions.
Today could see the ‘Greenback’ rise further if the printing of the US initial jobless claims figures fall as expected.
These will be followed by the publication of the US continuing jobless claims figures which are also expected to decrease.
Pound traders, meanwhile, will be focusing on the Bank of England (BoE) interest rate decision at midday, in which rates are expected to remain at 0.75%.
Any dovish comments about the state of the UK economy made during the minutes, however, could see the GBP/USD exchange rate fall further.
Prime Minister Theresa May is heading to Brussels today to meet the EC President Jean-Claude Juncker and try to secure legally-binding changes to the Brexit deal.
This is causing many GBP traders to remain cautious as the EU has previously stated its reluctance to renegotiate the Brexit deal, and the Northern Irish backstop has remained a contentious issue.
Pound US Dollar Exchange Rate Falls as UK House Prices Slump
Today saw the publication of the UK Halifax house prices figures for January, which fell below expectation by -2.9%.
Gary Barker, the CEO of Reapit, commented:
‘With Brexit negotiations still in deadlock, it is unsurprising that the property market continues to stagnate, with just 0.8% annual house price growth, and a monthly fall of -2.9%. Little progress was made in January… [Our] data shows that a lack of clarity has caused buyers and sellers to abstain from engaging the market.’
GBP traders are becoming increasingly skittish as the UK economy shows signs of slowing.
Today will also see the Governor of the BoE, Mark Carney, deliver a speech – and with the slew of recent poor UK data releases – the GBP/USD exchange rate will likely slip on any dovish comments from.
USD/GBP Forecast: ‘Greenback’ Could Benefit if Brexit No-Deal Fears Mount
GBP traders will be focusing on Brexit developments this week following Theresa May’s meeting with Jean-Claude Juncker, and with any signs that the UK and the EU are failing to come to a consensus Sterling could fall.
Tomorrow, meanwhile, will see James Bullard, the President of the Federal Reserve Bank of St. Louis, deliver a speech – any signs of bullishness could dampen confidence in the ‘Greenback’.
USD investors, however, will be focusing on political developments as the divide between US Government continues to show signs of widening as Trump continues to insist on funding for the Mexican border wall.
The USD/GBP exchange rate, however, will be dictated by Brexit developments this week as the UK and the EU will determine the tone and content of debates going ahead.
If a no-deal shows any signs of becoming likely, the USD/GBP exchange rate will almost certainly rise.