Pound Sterling US Dollar (GBP/USD) Exchange Rate Muted Ahead of Phase 1 Trade Talks
The Pound Sterling US Dollar (GBP/USD) exchange rate remained flat on Friday morning. This left the pairing trading at around $1.3082.
The US Dollar remained under pressure this week thanks to the impasse in Congress over additional US stimulus.
Added to this, trader attention has been on the upcoming meeting between US and Chinese officials this weekend.
Top officials from both countries are expected to recommit to a Phase 1 trade deal despite China being far behind schedule on their promised purchases of US exports.
Despite escalating tensions between Washington and Beijing, US officials noted the trade deal will not be abandoned.
On Thursday, White House economic adviser Larry Kudlow said:
‘They have said they intend to implement the plan and we are engaged with them.
‘We have big differences with China on other matters, but regarding the Phase 1 trade deal, we are engaging.’
Sterling (GBP) Muted as UK Imposes Quarantine Measures on France
The Pound remained flat this morning after Britain announced quarantine measures would be imposed on France from Saturday.
This came just after the French Prime Minister said the infection numbers were going ‘the wrong way’. It was also warned that France would take ‘reciprocal measures’.
Britain’s Transport Secretary Grant Shapps noted the reason for the measures was because the rate of infection jumped above 20 cases per 100,000 people.
Speaking to BBC Breakfast, he stated:
‘We’ve worked so hard in this country to get our level of infections down, the last thing we want do is to have people returning and bringing the infection with them. It’s to protect everybody.’
Meanwhile, Sterling remained flat as the currency continued to be supported by increased hopes for a post-Brexit trade agreement.
The UK’s chief negotiator, David Frost said a deal between the UK and EU could be reached by September.
He noted this ahead of the next round of negotiations with his European Union counterpart, Michel Barnier.
Pound US Dollar Outlook: US-China Phase 1 Deal in Focus
Looking ahead to this afternoon, the US Dollar (USD) could suffer losses following the release of the latest US retail sales data.
If sales show consumers aren’t as confident in July and show signs the rebound in the US economy is faltering, the Dollar will fall.
Meanwhile, trader attention will be on this weekend’s meeting between US and Chinese officials.
If the meeting is a success and Washington and Beijing recommit to the Phase 1 deal, it will boost risk appetite. This could offer the riskier Sterling support and send the Pound US Dollar (GBP/USD) exchange rate higher.