GBP/USD rates have proved more volatile than most other GBP pairs since the start of April, with the pound threatening to make a move back above the interbank rate 1.32, only for those clients holding the pound to be left disappointed once again.
|Currency Pair||% Change (Month)||Difference on £200,000|
Last week’s move was a continuation of the recent trend, with the pound finding plenty of support above 1.30 after its initial losses.
GBP’s failure to sustain any impact above the interbank rate of 1.32 could be a concern to those clients, looking to execute a short-term GBP/USD currency exchange.
The pound has threatened to make a move against the greenback on more than one occasion since the turn of the year but this prospective upturn was linked, at least in some part, to many of the dovish early year US economic forecasts.
These predictions warned of an imminent slowdown in the US economy, which helped support GBP’s value during a particularly challenging period in Brexit talks. At this time the then standoff between the UK government and Brussels showed no signs of thawing, with the markets starting to factor in a prospective No-deal scenario.
Whilst economic figures have dipped slightly in the manufacturing & service sectors, US economic output continues to impress for the most part. Despite what at the time seemed like very premature talk of a prospective recession, the USD managed to survive any continued losses, finding plenty of support all the way up to and beyond 1.30, with this trend continuing around the current levels.
However, despite the relative sanctuary in the US economy, some worrying undertones remain and continue to cast a dark shadow, or provide ammunition to those critics, unaverred by the current governments proven economic success.
The main economic concerns continue to centre around the longstanding trade standoff with China, and the longer-term negative ramifications of this.
Whilst the full impact of this will not be fully integrated into the US’s economic standing for a number of months, and despite varying reports of the prospective final losses, it is likely to impact US Gross Domestic Product figures, which is ultimately the bottom line for any economy and a potential downward trigger for the currently impenetrable USD.
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