Pound US Dollar (GBP/USD) Exchange Rate Flat as US-China Deal in ‘Final Throes’

Pound Sterling US Dollar (GBP/USD) Exchange Rate Muted as Trump Supports Hong Kong Protestors

The Pound Sterling US Dollar (GBP/USD) exchange rate remained flat, with the pairing trading at around $1.2868.

The Dollar was provided with an upswing of support on Wednesday as investors looked ahead to a US-China trade deal.

Overnight, US President Donald Trump said Washington and Beijing were in the ‘final throes’ of work on a deal to calm trade tensions after Tuesday’s phone call.

However, the President’s support for the Hong Kong protestors has been a further source of tension.

Speaking to reporters at the White House, Trump said:

‘We’re in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever. It’s going very well but at the same time we want to see it go well in Hong Kong.’

While the President’s upbeat comments on trade supported markets, gains were limited in the ‘Greenback’ as trade is slowing ahead of Thursday’s US Thanksgiving holiday.

US Dollar (USD) Under Pressure as Consumer Confidence Slumps Again

On Tuesday, data revealed that US consumer confidence slumped for the fourth consecutive month in November.

While this comes amid worries about US business conditions and employment prospects, confidence remained at levels that support a steady pace of consumer spending.

The survey has retreated from highs, although still remains at levels that are consistent with an economy growing at a moderate pace.

Meanwhile, further data revealed an unexpected slump in new home sales in October.

However, losses were limited as September’s data was upwardly revised, revealing purchases hit the highest level in over 12 years.

Sterling (GBP) Muted as Conservative Lead Narrows

The Pound remained muted against the US Dollar on Wednesday as election pessimism weighed on the currency.

As the UK gets closer to 12th December election opinion polls this week revealed that Boris Johnson’s Conservative Party is seeing its lead against opposition parties is narrowing.

On Monday, an ICM poll revealed the Tories’ lead of 10 points fell to a seven-point lead in just a week.

Added to this, on Tuesday a poll from Kantar showed that Labour squeezed the Conservative lead advantage from 18 to 11 points.

However, Sterling losses were limited as many analysts expect Boris Johnson to remain in Downing Street after the election.

Commenting on this, fixed income and FX strategist at SEB, Lauri Hälikkä said:

‘The Pound has strengthened as a reassuring Tory majority would mean that the risk of hard Brexit is small while avoiding political lock-ups in Parliament and getting a growth-oriented economic policy.

‘A Labour victory would certainly give a softer Brexit but also very radical socialist policies, which few believe would be good for the Pound.’

Pound US Dollar Outlook: Will Personal Spending Limit USD Losses?

Looking ahead to this afternoon, the US Dollar (USD) could slide against Sterling (GBP) following the release of October’s durable goods orders.

If US durable goods orders slump further than expected between September and October, it is likely the ‘Greenback’ will slump.

However, losses could be limited by October’s US personal spending data which could rise higher than expected.

If data reveals the US consumer continued to fuel the economy in October, the Pound US Dollar (GBP/USD) exchange rate could be left flat.

Millie Empson

Contact Millie Empson