Pound to US Dollar Exchange Rate Steadies after Week of Poll Reactions
For most of the week, the Pound Sterling to US Dollar (GBP/USD) exchange rate has been climbing in reaction to a combination of UK election hopes and US-China trade uncertainties. The Pound (GBP) steadied today however amid a lack of fresh drives.
Since opening this week at the level of 1.2833, GBP/USD has been trending with an upside bias.
Yesterday saw GBP/USD briefly touch on a weekly high of 1.2948 and the pair is currently trending near the level of 1.2900.
However, despite this week’s solid gains GBP/USD has only just recovered last week’s losses, and remains below last week’s best levels of 1.2965.
Today’s movement saw both currencies steadying, as UK data failed to impress investors and the US Dollar’s (USD) losses were limited amid persisting trade hopes.
Pound (GBP) Exchange Rates Struggle to Find Support in UK Confidence Results
This week has seen the Pound (GBP) once again influenced by developments in UK politics rather than domestic data.
The currency has been driven higher by a major poll indicating that the ruling Conservative Party will win a majority in next month’s 2019 UK General Election, but it has been unable to reach its best levels as a Conservative win is already largely priced in.
While hopes for a Conservative win are keeping the Pound sturdy, UK data has done little to make investors more optimistic about Britain’s outlook.
This morning saw the publication of Britain’s November consumer confidence results from GfK, which met forecasts by remaining stuck at a weak -14.
The data indicated that Brexit uncertainty was still keeping pressure on domestic economic activity. According to Joe Staton, Client Strategy Director at GfK:
‘Uncertainty is nobody’s friend. So, while many issues are under the spotlight in this election, political parties will need to satisfy voters that they will be effective for the wider economy and that, as a consequence, people will be better off next year and beyond.’
US Dollar (USD) Exchange Rates Benefit from Economic and Trade Hopes
While market demand for the US Dollar (USD) has been mixed throughout this week, numerous factors supporting the currency are keeping it from falling further towards the end of the week and are helping to prevent GBP/USD from further gains.
US Dollar movement was limited yesterday as US markets were closed to observe the Thanksgiving public holiday, but the currency continued to find support from the key US growth report published earlier in the week.
US growth estimates were solidly better than expected, softening market speculation that the Federal Reserve will become more dovish again and boosting the US Dollar.
The US currency is also benefitting from continued hopes that US-China trade negotiations could lead to a ‘phase one’ trade deal soon, even despite seemingly higher tensions between the nations this week.
Pound to US Dollar (GBP/USD) Exchange Rate Awaits Further Polling and US Data
While the Pound to US Dollar (GBP/USD) exchange rate could remain relatively steady until markets close for the week, the pair could become even more volatile in the coming weeks as investors await the 12th of December UK General Election.
With less than a fortnight until the election, Pound movement is likely to become even more heavily focused on developments in politics and the latest polling.
Signs that Britain’s opposition Labour Party are gaining on the ruling Conservatives in the polls would put fresh pressure on the Pound (GBP), but strong polls for the Tories would help the Pound to trend near its highs.
As well as continued US-China trade developments, the US Dollar (USD) is likely to be influenced by key US data due for publication over the coming week as well.
US manufacturing data due on Monday and of course Friday’s Non-Farm Payroll job stats will be major publications for Pound to US Dollar (GBP/USD) exchange rate investors next week.