Pound US Dollar (GBP/USD) Exchange Rate Steadies as G20 Summit Remains in Focus

June 28, 2019 - Written by John Cameron

STORY LINK Pound US Dollar (GBP/USD) Exchange Rate Steadies as G20 Summit Remains in Focus

GBP/USD Exchange Rate Flat, US Dollar Falls on US-China Trade Deal

The Pound US Dollar (GBP/USD) exchange rate held steady this morning and is currently trading around $1.268 on the interbank market.

The US Dollar (USD) stabilised against the Pound (GBP) as traders brace for the G20 summit today in Japan, in which President Donald Trump will meet with this Chinese counterpart, Xi Jinping to discuss trade between the two superpowers.

Any signs of a deal emerging between the US and China could weaken the US Dollar as risk-on status would have traders be fleeing the USD safe-haven to riskier assets like the Australian and New Zealand Dollar.

Conversely, however, this could benefit for the ‘Greenback’ if the US and China fail to make any headway on a trade deal, as USD would benefit from its safe-haven status.

USD traders, meanwhile, will be awaiting the publication of the Chicago Purchasing Managers’ Index figures for June today, which are expected to ease.

These will be followed by the US personal income figures for May, which, too, are expected to decrease.

As a result, we could see the GBP/USD exchange rate begin to rise later on this afternoon.

GBP/USD Exchange Rate Stabilises as US Growth Figures Holds Steady

The Pound, meanwhile, failed to benefit from todays’ UK growth figures for the first quarter, which stabilised at 0.5%.

Rob Kent-Smith at the Office of National Statistics commented:

‘GDP grew solidly and was unrevised in the first quarter of 2019, with manufacturing seeing strong growth due to orders being brought forward ahead of the UK’s original EU departure date.’

Today also saw the publication of the UK GfK consumer confidence figures for Jun, which eased at 13.

This has held back the Pound as UK market confidence continues to struggle as the Tory leadership race is tending to eclipse any serious developments surrounding Brexit.

Boris Johnson, the Tory leadership favourite for the next Prime Minister, has left some Sterling traders feeling jittery on increased no-deal Brexit fears.

Mr Johnson said:

‘I’m not attracted to the idea of a no-deal exit from the EU but, you know, I think it would be absolutely folly to rule it out. I think it’s an essential tool of our negotiation.’

GBP/USD Outlook: UK Brexit Debates and Tory Leadership Race in Focus

Pound traders will be looking ahead to Monday’s printing of the UK Markit Manufacturing PMI figures for June, which are expected to increase.

We could likely see the Pound rise as a result, as this would buoy market confidence and could ease growth fears surrounding the UK economy.

USD investors, meanwhile, will be looking ahead to Monday’s US ISM Manufacturing PMI figures for June.

The USD/GBP exchange rate, however, will be determined by the outcome of today’s G20 summit.

Any signs of a deal between US and China would see the ‘Greenback’ gain, and these would likely hold into the beginning of next week.

UK political developments will also remain in focus, and as Boris Johnson becomes increasingly resilient around the no-deal Brexit issue, we could see uncertainty surrounding the UK’s future with the European Union hold back the GBP/USD exchange rate.

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 Dollar Pound Forecasts Pound Dollar Forecasts Pound Sterling Forecasts