Pound US dollar exchange rate rallies as Trump lashes out at trade partners, bemoans strength of USD
Philip McHugh July 23rd 2018 - 2 minute read
The pound found some much-needed relief on Friday, with the currency rebounding from the lows struck earlier in the week as markets sought to profit from its heavy losses.
Sterling is holding steady this morning, with GBP/EUR muted at €1.1205, GBP/USD flat at $1.3141 and GBP/CAD subdued at C$1.7264, while GBP/AUD and GBP/NZD hold steady at AU$1.7712 and NZ$1.9277 respectively.
Looking ahead, the euro could move lower today should sentiment have fallen as expected in the Eurozone’s latest consumer confidence index.
What’s been happening?
The pound began to find its feet again at the end of last week’s session after a run of gloomy data, slashed expectations of a rate hike from the Bank of England (BoE) in August, causing Sterling to experience its worst week of losses since May.
This left the pound looking like a bit of a bargain in the eyes of traders and leading them to snap up the currency; something which was accentuated as other currencies took a dive.
The GBP/EUR exchange rate began to edge higher at the end of last week’s session, with a slightly better-than-expected Germany PPI reading failing to inspire demand for the euro.
The GBP/USD exchange rate soared on Friday, climbing over half a cent as President Trump lashed out over monetary policy in China and the EU, while bemoaning the strength of the US dollar and the Federal Reserve’s decision to raise interest rates.
Trump also ratcheted up his trade rhetoric against China, suggesting in an interview with CNBC that he would be willing to place tariffs on all imports from the country.
What’s coming up?
Looking ahead, a lull in UK data is likely to see GBP investors turn their attention back to political developments in Westminster.
Parliament is due to break for summer recess on Tuesday and while this is generally a period of calm as MP’s wind down their affairs, there are fears that the pound could be rocked by Tory rebels mounting a last-minute leadership challenge.
Meanwhile the euro is expected to slide this afternoon with the release of the Eurozone’s latest consumer confidence index, which is expected to reveal that sentiment continued to slide in July.
Finally the US dollar could face downside pressure today, with forecasts that US data will show a slide in existing homes sales in June.