Pound to US Dollar Soars as Brexit Hopes Offset Weak UK GDP Figures: Currency News and Forecast

Pound (GBP) Gains despite Poor GDP Figures, Pound to US Dollar Hits $1.30

The Pound to US Dollar exchange rate strengthened on Friday, while GBP also gained against the Euro after fluctuating through the session.

GBP exchange rates fell back through the first half of Friday’s trading session as the UK’s latest GDP figures printed below expectations.

While Friday’s release showed the UK economy returned to growth in the three months to August, it also reported that growth only expanded by 2% month-on-month, stoking concerns over the trajectory of the UK’s economic recovery.

However, Sterling ultimately closed out last week’s session on a high, rallying on the back of some cautious Brexit optimism.

Looking ahead, it looks to be a choppy week of trade for the Pound as the looming Brexit deadline sees the UK and EU in a race against time to at least get the outlines of a trade deal ironed out.

 

Euro (EUR) Strengthens despite Coronavirus Concerns

The Euro (EUR) ticked higher on Friday, finding support from the improving market sentiment which undermined the US Dollar (USD), the single currency’s main rival.

This uptick in EUR exchange rates came in spite of growing concern over Europe’s coronavirus resurgence as several cities reported record spikes in cases, and more restrictions were implemented across the continent.

The risk-on mood pushed the Euro to US Dollar exchange rate up to $1.18, while the EUR/GBP fell at the end of the session as Brexit optimism boosted the Pound.

Coming up this week, the focus for EUR investors will be on the latest ZEW surveys. Will the Euro find support in another improvement in German economic sentiment in Germany this month?

 

USD Slips as US Stimulus Hopes Push Pound to US Dollar Higher, USD/EUR Dips

The US Dollar (USD) experienced a broad selling bias at the end of last week’s session as a risk-on mood undermined the appeal of the safe-haven ‘Greenback’.

The improved mood came on the back of revived hopes for a comprehensive US stimulus package as reports suggested that talks between Democrats and Republicans are ongoing, in spite of a tweet from President Trump earlier in the week calling for a halt to negotiations.

This improved mood weighed on USD exchange rates as the Euro and Pound to US Dollar both made solid gains.

Looking ahead, it’s likely we could be in for more USD volatility over the coming week as US political uncertainty starts to exert greater pressure on the US Dollar the closer we get to November’s election.

 

Canadian Dollar (CAD) Bolstered by Upbeat Data

The Canadian Dollar (CAD) struck higher on Friday, with the appeal of the ‘Loonie’ bolstered by a larger-than-expected fall in Canada’s unemployment rate in September as the jobless rate hit its lowest level since March.

 

Australian Dollar (AUD) Slips on Fresh Stimulus Impasse

After rallying on Friday, the Australian Dollar (AUD) is off to a poor start so far this week as hopes for a US stimulus package were dashed by US House Speaker Nancy Pelosi deeming Trump’s new stimulus offer as ‘insufficient’.

 

New Zealand Dollar (NZD) Dented by Risk-Off Trade

The New Zealand Dollar (NZD) opens this week’s session on the back foot as some market pessimism undermines demand for the risk-sensitive currency.

Meanwhile, the ‘Kiwi’ could experience some volatility over the coming week ahead of New Zealand’s general election next weekend.

Matthew Andrews

Contact Matthew Andrews


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