Last week’s high: $1.2511
Last week’s low: $1.2407
Pound to US Dollar Exchange Rate Fails to Sustain Gains amid Lasting Brexit Fears
The Pound to US Dollar exchange rate ended last week trading lower as the latest Brexit jitters and US data kept the pair under pressure.
Sterling initially rebounded as the Conservative Party leadership contest finally came to an end, but the currencies gains were capped by comments from EU officials.
The remarks indicated that the EU is unwilling to renegotiate the UK-EU withdrawal agreement, which bolstered fears for a no-deal exit.
This made it easier for the US Dollar to push GBP/USD lower at the end of the week.
The US Dollar, meanwhile, fluctuated amid speculation that the Fed could cut US interest rates by as much as 50 basis points next week. However, as Friday’s US growth rate data beat expectations, Fed interest rate cut bets lightened and the US Dollar saw some late-week gains.
USD Outlook: Federal Reserve July Decision in Focus
The Pound to US Dollar exchange rate could be driven more by data and Central Bank news this week as we have a busy economic calendar ahead.
The US data to look out for includes Personal Consumption Expenditure (PCE) data on Tuesday, manufacturing PMIs on Thursday, and July’s Non-Farm Payroll report on Friday.
UK consumer confidence data will be published as well, but the week’s central bank news is more likely to be influential.
If the Federal Reserve cuts rates by 0.25% on Wednesday and doesn’t adopt an overtly dovish tone, the US Dollar could benefit. However, a sharper rate cut or indications that rates could be cut more aggressively in the months ahead would be USD negative.
The Bank of England’s (BoE) August policy decision on Thursday could prove influential if the bank has any new comments to make regarding Brexit and the new UK government.
Speaking of the government, any surprising shifts in tone from Prime Minister Boris Johnson on the Brexit process are likely to remain a big focus for Pound traders.
15:30 US Dallas Fed Manufacturing Index
13:30 US Personal Consumption Expenditure (PCE)
15:00 US Pending Home Sales
00:01 UK GfK Consumer Confidence
13:15 US ADP Employment Change
13:30 US Employment Cost
14:45 US Chicago PMI
19:00 US Federal Reserve Policy Decision
09:30 UK Manufacturing PMI
12:00 UK Bank of England Policy Decision
15:00 US Manufacturing PMI
09:30 UK Construction PMI
13:30 US Trade Balance
13:30 US Non-Farm Payroll Report
15:00 US Factory Orders
15:00 US Michigan Consumer Sentiment
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