Last week’s high: $1.3166
Last week’s low: $1.2968
US Dollar Recovers Some Losses despite US Midterm Election Results
In the first half of last week, Brexit hopes helped the Pound to climb versus the US Dollar, which was weakened following the 2018 midterm elections.
As pollsters predicted, the US Democratic Party ended up taking majority control of the House of Representatives, essentially limiting US President Donald Trump’s ability to pass new fiscal policy for now. This prompted investors to sell the US Dollar from its recent highs in the middle of the week.
However, towards the end of the week the Pound shed most of its gains after the release of some underwhelming UK data.
On Friday, Britain’s Q3 growth rate report met expectations but the nation’s business investment projections saw unexpectedly steep contractions. The data indicated that Brexit uncertainties were having a major impact on business activity towards the end of the year.
Meanwhile, the US Dollar found fresh support as the Federal Reserve indicated that its monetary policy plans had not been negatively affected by losses in US stock markets or the midterm elections outcome.
USD Outlook: Brexit Deal Would Cause GBP/USD Surge
Speculation that the UK and EU could finally reach a solid Brexit deal in the coming weeks has been the primary factor keeping Sterling afloat in recent weeks – and such a deal being confirmed by officials would cause a major surge in demand for the British currency.
The announcement of a Brexit deal is likely to be among the most influential events possible for the Pound right now and would also likely be the primary cause of Pound to US Dollar exchange rate movement.
As November is almost halfway through, hopes that a deal can be reached before the end of the month are likely to dominate Pound trade. As a result, upcoming UK job market and inflation data may only have a limited impact on Sterling.
The US Dollar could potentially react to upcoming US inflation or retail sales stats, but reaction to these stats would likely be overshadowed by any potential Brexit news.
09:30 UK Job Market Report
09:30 UK Inflation Rate
13:30 US Inflation Rate
09:30 UK Retail Sales
13:30 US Import and Export Prices
13:30 US Retail Sales
15:00 US Business Inventories
14:15 US Industrial and Manufacturing Production
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