Last week’s high: $1.3212
Last week’s low: $1.3075
Pound Recovers from Lows Versus US Dollar on Trump Comments
While most of last week’s US data wasn’t particularly impressive, it was solid enough to keep investors confident that the Federal Reserve would continue to hike US interest rates and this made it easier for the US Dollar to sustain some gains against a persistently unappealing Pound.
While uncertainties about the Brexit process and how it could impact the UK economy and monetary policy weighed on the Pound, the US Dollar was supported by other factors, largely revolving around expectations that US interest rates would continue to rise.
Despite criticism over US Dollar strength and high interest rates from US President Donald Trump, the Fed indicated that its rate hike path would not be influenced by political considerations.
Friday afternoon saw the publication of Q2 US Gross Domestic Product (GDP) projection data, which met forecasts and jumped to 4.1% quarter-on-quarter – the best quarter for US growth since 2014.
While US Personal Consumption Expenditure (PCE) price index data fell short, it was still sturdy enough to keep investors bullish about the Federal Reserve’s outlook.
USD Outlook: US Jobs and Central Bank Decisions in Focus
There appears to be no stopping the US Dollar’s recent strong streak, and if the Pound remains weak then the Pound to US Dollar exchange rate could be in for further losses in the coming week.
A slew of upcoming US data could give the US Dollar further support and keep investors optimistic about the Federal Reserve monetary policy outlook, as well as of course the Federal Reserve itself.
US PMI data and jobs data, including the Non-Farm Payroll report from July, will be published throughout the week and are likely to influence the US Dollar outlook if they surprise investors.
The biggest data release of the week for USD investors will be Wednesday’s Federal Reserve policy decision however, when the Fed will give its latest updates on the US economic outlook and likely hint whether there will be one or two more interest rate hikes this year.
It will be a big week for the Pound too, as whether or not the Bank of England (BoE) hikes UK interest rates on Thursday will likely have a big impact on the Sterling outlook.
09:30 UK Mortgage Lending and Approvals
15:00 US Pending Home Sales
00:01 UK GfK Consumer Confidence
13:30 US Personal Consumption Expenditure (PCE) Data
09:30 UK Manufacturing PMI
13:15 US ADP Employment Report
15:00 US ISM Manufacturing PMI
19:00 Federal Reserve Policy Decision
09:30 UK Construction PMI
12:00 Bank of England Policy Decision
15:00 US Factory Orders
09:30 UK Services and Composite PMI
13:30 US Trade Balance
13:30 US Non-Farm Payroll Report
15:00 US ISM Non-Manufacturing PMI
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Senior Currency Broker
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