Last week’s high: $1.3941
Last week’s low: $1.3725
US Dollar Fails to Capitalise on Pound Weakness
The Pound to US Dollar exchange rate slipped from its best levels since the 2016 Brexit vote on Friday afternoon, but due to USD weakness, losses were limited.
GBP/USD investors were disappointed by Britain’s December retail sales results, which came in below expectations. The data indicated that more consumers were spending on Black Friday in November than holiday shopping in December, resulting in a sharper than expected drop in consumer activity.
The US Dollar was unable to capitalise on a weak Pound as investors became anxious about the possibility of a US government shutdown. As US markets opened on Friday it became unclear whether US Congress would pass a government funding bill.
In addition, the US Dollar has been left struggling amid uncertainty over how many times the Federal Reserve will hike US interest rates this year.
USD Outlook: US Growth Report in Focus
The US Dollar’s weak streak could be set to continue if domestic political uncertainty worsens and if upcoming US data fails to impress. Monday will see investors digesting the weekend’s government funding developments and key Q4 US growth data will be published on Friday.
GBP/USD is also likely to be influenced by British data, particularly Wednesday’s November job market report. Pound investors will be focused on wage growth as better-than-forecast wage data would likely boost Bank of England (BoE) interest rate hike bets.
Other notable data to look out for next week includes Britain’s own Q4 Gross Domestic Product (GDP) results, as well as US home sales and durable goods orders.
09:30 UK Public Sector Net Borrowing
09:30 UK Job Market Report
09:30 UK Jobless Claims
14:45 US Markit PMI Projections
15:00 US Existing Home Sales
13:30 US Jobless Claims
13:30 US Wholesale Inventories
15:00 US New Home Sales
09:30 UK Growth Rate
13:30 US Growth Rate
13:30 US Durable Goods Orders
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Senior Currency Broker
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