Last week’s high: $1.2703
Last week’s low: $1.2576
Pound to US Dollar Gains Limited by Brexit Uncertainties
Despite a lack of drive in the Pound last week, the British currency was able to sustain some gains against a weakened US Dollar.
In the middle of the week, the Federal Reserve indicated it could ignore warnings about slowing global growth and continue to hike US interest rates gradually in 2019. This briefly caused a US Dollar selloff as investors became anxious about the possibility that US rates may climb too high for the economy to handle.
US Dollar demand remained weak on Friday as US Gross Domestic Product (GDP) data fell short of expectations, in the latest sign that the US economy could be impacted by slowing global growth.
However, uncertainties about how the Brexit process will unfold, as well as comments from Fed officials suggesting that the bank was open to reassessing its monetary policy plans depending on data, prevented the Pound to US Dollar exchange rate from climbing too high.
USD Outlook: US Data to Drive GBP/USD amid Brexit Uncertainties
UK Parliament is on winter recess until the New Year, leaving markets without any significant clarifications on Brexit and leaving the Pound volatile.
Sterling’s movements will remain choppy unless there are surprising developments in UK politics next week, as the week’s only UK dataset is unlikely to be particularly influential.
This means the US Dollar is likely to drive Pound to US Dollar exchange rate movement for the coming week.
The US Dollar will be driven by US data, and could strengthen if the reports comes in strongly enough to make investors more optimistic about the Federal Reserve’s policy outlook.
13:30 US Chicago Fed National Activity Index
15:00 US Richmond Fed Manufacturing Index
13:30 US Jobless Claims
15:00 US CB Consumer Confidence
15:00 US New Home Sales
09:30 UK Finance Mortgage Approvals
13:30 US Wholesale Inventories
14:45 US Chicago PMI
15:00 US Pending Home Sales
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Senior Currency Broker
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