GBP/USD rates moved back above 1.23 yesterday on the interbank exchange, with the pound receiving plenty of support during the afternoon. Sterling rose against the USD, peaking at 1.2309 on the interbank exchange before the close of European trading.
Whilst the USD found some support overnight, pushing it back below this threshold, the dollars run on 1.20 seems to have been curtailed for the time being.
Whilst sterling seems to have curbed any further aggressive losses against the USD, at least for the time being, concerns over the UK’s final Brexit position and a robust US economy, amongst other external variables, continue to handicap any major advances for GBP.
As shown from the chart above GBP/USD movement over the past month has remained relatively subdued, with the pound finding plenty of protection above 1.20 but showing no signs of mounting a sustained recovery against the USD, whilst so much market uncertainty around the UK economy remains.
The longer-term economic outlook for the UK remains shrouded in mystery and whilst Brexit continues to cast a dark shadow over the markets, investors may continue to shy away from the pound, which has been the underlying trend in recent months.
The US/China trade war continue to rumble on, and with no real indication that a significant breakthrough is imminent, the key question now is whether there is already likely to be long-term damage to the US economy, as a result of the on-going standoff?
Whilst Market watch pointed towards an inevitable slowdown in the agricultural sector, which may likely hit farmers in the mid-west regions, there is no real evidence
Despite these growing concerns and the US stock market taking a big hit in August, Consumer Confidence in the US economy remains high, falling only very slightly from last months revised figure of 135.8, to 135.1.
This could indicate that consumers remain confident in the current trajectory of the US economy, which in turn could help support the USD value around its currency levels against GBP.
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