April 12, 2019 - Written by John Cameron
STORY LINK Pound US Dollar (GBP/USD) Exchange Rate Rises as US-China Trade War Weighs on US Economy
GBP/USD Exchange Rate Climbs as US Economy Hit by Trade War Struggles
The Pound US Dollar (GBP/USD) exchange rate edged higher today and is currently trading around $1.3072 on the inter-bank market.
The US Dollar (USD) fell against Sterling (GBP) today following the news that Chinese trade with the US had slumped by 28% in the first-quarter, indicating a pressure on the US from the ongoing trade war between the two superpowers.
This has particularly weighed on the ‘Greenback’ today as many of the imports included iron ore, coal and soybeans which are commodities that most benefit the US economy.
Julian Evans-Pritchard, a Senior China Economist for Capital Economics, remained optimistic however, saying:
‘While a US-China trade deal looks increasingly within reach, the reversal of US tariffs would only provide a small boost to exports of around one to two per cent. [And] [w]ith growth set to remain weak in the coming quarters a strong rebound in exports therefore looks unlikely.’
Many US traders, however, are awaiting the publication of the flash US Michigan Consumer Sentiment Index for April today, which is expected to come in slightly lower than March’s figures.
The Pound, meanwhile, has fallen today as Brexit uncertainty has rising on a general lack of developments since the EU granted its 6-month delay to the UK’s withdrawal process, allowing Prime Minister Theresa May another chance at pushing forward with her deal.
GBP/USD Exchange Rate Rises as May Defends Brexit Extension
Theresa May defended the extension to Brexit yesterday, saying:
‘The choices we face are stark and the timetable is clear. I believe we must now press on at pace with our efforts to reach a consensus on a deal that is in the national interest.’
However, cross-party talks still continue between the Conservatives and the Labour, with the Labour leader, Jeremy Corbyn, remaining generally sceptical of May’s position regarding the Brexit withdrawal agreement.
Mr Corbyn added:
‘The prime minister has stuck rigidly to a flawed plan and now the clock has run down, leaving Britain in limbo and adding to the deep uncertainty of business, workers and people all across this country.’
There are no notable UK data releases today, with many Pound traders focusing on Brexit developments instead.
GBP/USD Forecast: Sterling Could Rise on Cross-Party Brexit Consensus
Looking ahead to next week, Pound traders will be focusing on Tuesday’s releases of the UK ILO unemployment rate figures for February, which are expected to rise.
These will be followed by the UK average earnings figures for February, which, however, are expected to remain static.
US Dollar investors, meanwhile, will be focusing on US-China trade talk developments, which have appeared to stall over this week.
The GBP/USD exchange rate will remain sensitive to Brexit developments, as Theresa May now has to convince an increasingly divided Parliament to back her withdrawal agreement, and, if this looks increasingly likely, the Pound could rise.
International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way,
ensuring you get the best exchange rates on your currency requirements.
TAGS: American Dollar Forecasts Daily Currency Updates Pound Dollar Forecasts