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GBP/USD Nears Fresh 2019 Lows as Political Chaos Reigns in the UK

Last  week’s high: $1.2749

Last week’s low: $1.2563

 

Pound Sinks as Political Jockeying Begins

The Pound US Dollar exchange rate came dangerously close to striking a fresh 2019 low last week as political turmoil in the UK continued to dampen the appeal of Sterling.

Adding to the pressure GBP exchange rates were comments from Bank of England Deputy Governor Dave Ramsden as he suggested the banks recent growth forecasts may have been over optimistic.

Meanwhile, the US Dollar found support throughout the session due to rising global trade tensions, after China threatened to ban rare metal exports to the US and the White House imposed shock tariffs on exports from Mexico.

 

USD Outlook: Will a Rise in US Unemployment Drag on the US Dollar?

Looking to the week ahead, we are likely to see the GBP/USD exchange rate continue to trend lower throughout the first half of the session as UK PMI figures are expected to show private sector growth continued to stagnate in May.

Sterling sentiment is also likely to be dented by further political uncertainty in the UK as Theresa May steps down as Tory leader at the end of the week.

However, potentially reversing any losses at the tail end of the session will be the latest US payroll figures, where an expected slowdown in employment growth is expected to prompt a rise in unemployment in May.

 

Key Events

3rd Jun

09:30 UK Manufacturing PMI (May)

15:00 US ISM Manufacturing PMI (May)

4th Jun

09:30 UK Construction PMI (May)

15:00 US Factory Orders (Apr)

5th Jun

09:30 UK Services PMI (May)

13:15 US ADP Employment Change (May)

15:00 US ISM Non-Manufacturing PMI (May)

6th Jun

13:30 US Trade Balance (Apr)

7th Jun

13:30 US Non-Farm Payrolls (May)

 

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

 

 

Alastair Archbold

Foreign Exchange Manager

aja@fcgworld.co.uk

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