Trump?s Twitter Comments See Pound US Dollar Exchange Rate Rally

December 12, 2016 - Written by James Fuller

STORY LINK Trump?s Twitter Comments See Pound US Dollar Exchange Rate Rally

GBP USD Exchange Rate Update: Pound Demand Rises despite Slow Data Day

The Pound has risen considerably against the US Dollar today, posting gains of 0.7% to rise to a GBP USD interbank exchange rate of 1.26.

This sizable advance against the US Dollar has come against conventional logic, as little especially positive UK news has been released today.

The British Chambers of Commerce (BCC) have forecast that UK economic growth will slow in 2017, though on the other side, talk has been circulating about UK and EU citizens being allowed to remain in the EU and UK respectively after Brexit.

Pound Sterling Predictions: Losses Likely if Inflation Rate Results Match Forecasts

The next major UK ecostats will come over Tuesday and Wednesday, concerning November’s inflation rate and average earnings recorded in October.

In the former case, a rise is expected, while a latter slowdown in earnings is also forecast. If these predictions prove accurate, the Pound could well slump against the US Dollar, given the implication of future inflationary pressures.

Elsewhere, Wednesday is expected to show a rise in UK unemployment in October, while Thursday’s Bank of England (BoE) interest rate decision has another rate freeze expected.

US Dollar Pound Exchange Rate Drops after Trump Repeats Share-Shattering Trick

The US Dollar has slumped over the course of trading today, owing to another negative investor response to a problem caused by President-Elect Donald Trump.

In a déjà vu moment to the Boeing situation, Trump has sent shares in another US company tumbling by stating that Lockheed Martin’s jet construction costs are too high.

This reflects extremely poorly on Trump and the future US situation, given that causing a stock value of around $2bn with a simple social media post does not bode well for US businesses.

US Dollar to Pound Exchange Rate Outlook: Moderate Gains Possible on Predicted Fed Rate Hike

The major event for the US this week will come on Wednesday night, when the Federal Reserve makes its interest rate decision for December. A rate hike from 0.5% to 0.75% has largely been priced in.

While this would likely trigger a USD rise, the fact that it has been heavily predicted beforehand means that any gains may well be short-lived.

Earlier on in Wednesday, the November retail sales stats are due; these are set to show a potentially damaging drop from 0.8% to 0.3% on the year.

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