Despite reaching 8-month highs against the greenback last month, there has since been a recent sell-off for the pound, with interbank levels for cable rates now fluctuating back below 1.30.

Currency Pair% Change (Month)Difference on £200,000
GBPUSD2.49%$6,400

Much of the recent decline for the GBPUSD pairing has been due to the frictions in UK Parliament surrounding the UK’s exit deal from the EU and last week. The latest Gross Domestic Product (GDP) figure for the US economy provided further woes for the pound, as the release was much better than expected and saw a 1.2% increase from the previous of 3.2%.

Since the turn of the year, there have been a number of reports from accredited economic institutions that have suggested the US economy could begin to see signs of a slowdown in 2019, but with key US data releases continuing to show improvement, questions surround when these ‘frailties’ might begin to show.

However, over the last 12 months US President Donald Trump’s bullish approach to trade negotiation with China has seen the USD prosper, so in the longer term it might be of consideration that there is growing global support for China’s ‘Silk Road’ initiative, which currently has written cooperation of 126 countries and 29 international organisations, whilst Washington has expressed concern that the project could increase Beijing’s strategic influence.

US services data positive

Big week for US economic data

This week will host the release of key US economic data, with the addition of the latest interest rate decision from the Federal Reserve (Fed) set to be announced.

This afternoon, the preferred indicator of inflation for the Fed in the form of the Personal Consumption Expenditure Index will be release, which is currently expected to show a slight reduction of 0.1%.

On Wednesday, the Fed’s latest interest rate decision will be announced which is expected to maintain the current level of 2.5%, despite calls from the President for a cut following recent successive hikes, whilst on Friday the latest average earnings and non-farm payroll figures will be released.

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