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GBP/USD Slumps to Five-Month Low as UK Inflation Dips

Last week’s high: $1.3486

Last week’s low: $1.3308

Pound Nosedives as Falling Inflation Raises Doubts over BoE Rate Hikes

The Pound US Dollar exchange rate suffered its sixth consecutive session of losses last week with the pairing struggling in the face of renewed Brexit uncertainty and some lacklustre economic data.

Sterling’s heaviest losses came on Wednesday, as a surprise downturn in UK inflation prompted markets to slash their bets of a rate hike from the Bank of England (BoE) later this year.

Meanwhile after intensifying at the start of the session, the US Dollar’s rally appeared to run out of steam in the second half of the week as some dovish Federal Reserve minutes and Trump’s decision to cancel the North Korean nuclear summit weighed on market sentiment.

USD Outlook: USD Poised to Rise on Robust Payroll Figures

Looking ahead, the main driver of movement in the GBP/USD exchange rate is likely to be the publication of the latest US employment data.

This may see the US Dollar continue to tick higher if US payroll figures continue to expand at a robust pace as expected.

Meanwhile the Pound may attempt to repel the US Dollar’s advances should either the UK’s latest house price index or manufacturing PMI figures show some improvement, as economists expect they will.

 

Key Events

29th May

07:00 UK Nationwide House Price Index (May)

30th May

13:15 US ADP Employment Change (May)

13:30 US GDP 2nd estimate (Q1)

31st May

00:01 UK Consumer Confidence (May)

13:30 US PCE Index (Apr)

1st June

09:30 UK Manufacturing PMI (May)

13:30 US Non-Farm Payrolls (May)

15:00 US ISM Manufacturing PMI (May)

 

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

 

Arron Morris
Currency Trader
T: 01442 892 065

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