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GBP/USD Volatile Following Mixed UK Data

Yesterday’s high: $1.3008

Yesterday’s low: $1.2956

Sterling Fluctuates as UK Trade Disappoints

The Pound was pressured yesterday morning as UK data revealed that Britain’s trade deficit swelled to a new nine-month high in June, jumping from -£2.52bn to -£4.56bn.

However this was offset slightly by the UK’s industrial production figures as factory output rebounded from -0.2% to 0.3% in June, helping to allay fears that production would have declined for the entirety of the second quarter.

Meanwhile the US Dollar strengthened on Thursday as further US-North Korean tensions drove investors towards safe haven assets like the ‘Greenback’.

USD Outlook: US Inflation to Hold Steady?

The USD GBP exchange rate may stumble later this afternoon as the US releases its latest inflation figures, with expectations that core inflation will hold at 1.7% likely to cast further doubts over the possibility of another rate hike from the Federal Reserve in the near-future.

However, any potential fall in the ‘Greenback’ may be offset by a speech from Dallas Fed President Robert Kaplan, should he maintain that monetary policy should still be tightened.

Meanwhile a lull in domestic data on Friday will leave the Pound at the mercy of external influences, with further geopolitical tensions likely to lead to currency markets fluctuations.

Key Events

11th August

13:30 US Core Inflation Rate July

14:40 US Fed Kaplan Speech

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

Arron Morris

Senior Currency Broker
T: 01442 892 065

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