GBP/USD Holds above $1.31 as US Consumer Sentiment Slips

GBP/USD Exchange Rate Consolidates Gains on Soft US Consumer Confidence

UPDATE: The Pound Sterling to US Dollar (GBP/USD) exchange rate remains in a positive of strength this afternoon, with the pairing trading just above $1.31 following the release of the latest US consumer sentiment figures.

The University of Michigan’s consumer sentiment index fell for the first time in three months in April, sliding from 98.4 to 96.9 in April amidst a weakening outlook for the US economy.

This ensured that the US Dollar remained on the defensive this afternoon after being driven lower by rising market risk appetite earlier in the session.

GBP/USD Exchange Rate Climbs as US Dollar Hurt by Rising Risk Appetite

UPDATE: The Pound Sterling to US Dollar (GBP/USD) exchange rate is on the offensive this afternoon, with the pairing gaining almost half a cent as the ‘Greenback’ was undermined by a broad lift in market risk appetite.

Risk sentiment saw a marked improvement through the first half of the session thanks in part to a strong upswing in oil prices and some better-than-expected Eurozone industrial data.

However the US Dollar may attempt to mount a recovery later in the afternoon if US consumer confidence is shown to have improved in April.

GBP/USD Exchange Rate Stable Following Brexit Delay

The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading sideways this morning, with both currencies appearing content to hold their ground after Brexit jitters fade.

At the time of writing the GBP/USD exchange rate is virtually unchanged, leaving the pairing trading at $1.30 on the inter-bank market.

Pound (GBP) Steady as UK Avoids a No-Deal Brexit, For Now…

The Pound (GBP) is rangebound against the US Dollar (USD) and the majority of its other peers this morning as the UK currency continues to steady after Brexit was delayed again.

With the Brexit deadline can having been kicked down the road by six months we have seen the recent volatility in GBP exchange rates quickly dissipate as markets take a much-needed breather.

However, while the UK may have avoided the imminent threat of a no-deal Brexit GBP investors will likely remain aware of the increasingly fractious atmosphere in Parliament and the difficulty Theresa May still faces in finding a workable Brexit deal that will be accepted by the majority of MPs.

US Dollar (USD) Supported by Strong US Data

At the same time, the US Dollar (USD) is holding its ground this morning as the US currency consolidates Thursday’s gains following some upbeat domestic data and a slide in market risk appetite.

Data published yesterday revealed that US jobless claims fell from 204,000 to just 196,000 last week – the lowest reading since October 1969.

The data continues to point to a robust US labour market that should help to limit concerns that the US economy is barrelling towards a prolonged slowdown.

Lending further support to the US Dollar has also been the dip in market risk appetite in the second half of the week, with investors shying away from riskier currencies like the Australian Dollar (AUD) following a dip in oil and other commodities.

GBP/USD Exchange Rate Forecast: UK Economic Data to begin Influencing Sterling Again?

Looking ahead, after becoming increasingly detached from economic data in recent weeks as Brexit hysteria took hold, we may see the Pound US Dollar (GBP/USD) exchange rate start to settle next week, starting with the release of the UK’s latest employment figures.

While economists forecast that unemployment may have crept back up from 3.9% to 4% in February, the focus for GBP investors is likely to remain on the accompanying earnings figures, where a potential slide in wage growth could dent Sterling.

This will then be followed by the UK’s latest CPI figures on Wednesday, which could place even more pressure on GBP exchange rates if inflation tumbled in line with expectations in March.

Meanwhile USD investors will likely be focused on the latest US retail sales figures next week, with an expected rebound last month potentially boosting the US Dollar.

 

Matthew Andrews

Contact Matthew Andrews


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