Broad based selloff of US Dollar Causes GBP/USD Jump
UPDATE: A broad based selloff of the US Dollar seems to be gathering pace this afternoon as investors dump US Treasury bonds leading to a 1.1% decline in the GBP/USD exchange rate.
Currently one Pound is trading at $1.328, with the US Dollar also falling against most other currencies.
The selloff is thought to have been sparked by a combination of factors, including markets deciding the latest US tariffs were nothing to worry about, as well as fears that China’s economy is slowing and no new stimulus measures are expected.
GBP/USD Exchange Rate Pushed Higher by Supportive UK Retail Sales Data
UPDATE: The Pound Sterling US Dollar (GBP/USD) pairing has continued to rise today, with the latest movement being a 0.7% advance for the UK currency.
The continued appreciation is mainly down to a prolonged positive reaction to earlier retail sales data, which showed better-than-expected results for August.
Not every aspect of the sales data has won over economists, however; Centre for Economics and Business Research (CEBR) Economist Josie Dent has cautioned:
‘While today’s headline figure paints a rosy picture for retail, more timely indicators show that the high street is struggling this month.’
Surprise Retail Sales Growth Supports GBP/USD Exchange Rate Rise
The Pound (GBP) has firmed against the US Dollar (USD) today, following the news that UK retail sales have been more resilient than first expected.
This forecast-beating data has pushed GBP/USD up by 0.5%, to hit an interbank exchange rate of $1.32.
Monthly retail sales in August had been predicted to fall from 0.9% to -0.2% without fuel included and from 0.7% to -0.2% with fuel, but instead printed at 0.3% for both readings.
These sales figures have been received positively, although some more sceptical economists are attributing the results to the seasonal effect of summer.
First Day of EU Summit Unsettles GBP Traders as PM Challenges EU Brexit Proposal
In other UK news, Pound to US Dollar (GBP/USD) exchange rate gains have been limited following Wednesday’s EU summit.
During the first of two days of meetings, this summit for EU leaders saw no sign that an agreement over the Brexit process was forthcoming.
Prime Minister Theresa May put the onus on EU leaders to make the next step, asking them to ‘evolve’ their Brexit proposals and make them more appealing to both sides.
The current topic of discussion is the Irish border although more broadly analysts are considering what this development could mean for overall Brexit negotiations.
Unfortunately for GBP traders, it doesn’t look like the longstanding negotiation deadlock is any closer to being broken – this means there is a greater risk of a no-deal Brexit.
US Dollar to Pound (USD/GBP) Exchange Rate Declines on Cautious Reaction to Trade War
The US Dollar (USD) has fallen against the Pound (GBP) and most other peers today as the latest international trade developments fail to reassure USD traders.
The US and China have both imposed fresh trade tariffs on each other that will activate on 24 September – because the Chinese charges aren’t as serious as expected, the US Dollar has fallen.
In an unusual situation, because the damage might not be as bad as first thought for the US, there is higher risk sentiment and traders have instead turned to higher yielding commodity currencies.
GBP/USD Exchange Rate Forecast: Will US PMI Stats Push US Dollar Up?
The Pound (GBP) could make losses against the US Dollar (USD) on Friday, when US PMI data is due for release.
September’s initial estimates are predicted to show a faster pace of activity for the manufacturing, services and overall composite PMIs, with such results liable to boost US Dollar demand.