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Pound US Dollar (GBP/USD) Exchange Rate Steady, US-China Trade Deal Hopes Fade

November 19, 2019 - Written by John Cameron

GBP/USD Exchange Rate Steady, Fears Over US Economy Rise as US-China Trade Developments Stall

The Pound US Dollar (GBP/USD) exchange rate held steady today, with the pairing currently trading around $1.293 as waning hopes of a US-China trade deal weigh on the ‘Greenback’.

Analysts at Reuters commented:

‘Expectations had grown that Washington and Beijing would sign a so-called ‘phase one’ deal this month to scale back their 16-month-long trade war but those hopes received a setback on Monday after CNBC reported that China is pessimistic about agreeing to a deal.’

With US-China trade developments remaining in focus, the US Dollar (USD) failed to benefit from October’s US month-on-month housing starts figure, which rose to a 12-year high of 1.314 million.

Today also saw US building permits improve in October, with the figure rising from 1.391 million to 1.461 million.

Bill Banfield, Executive Vice President at Capital Markets, said:

‘This is an important report for future homebuyers since one of the largest deterrents to entering the market right now is the lack of robust housing options.’

GBP/USD Exchange Rate Rangebound, Markets Brace for Johnson-Corbyn Head-to-Head

The Pound (GBP) failed to gain on the ‘Greenback’ as markets brace for this evening’s televised election debate between Prime Minister Boris Johnson and Labour leader Jeremy Corbyn, the first debate of its kind ahead of the 12th December election.

Investors are remaining cautious, however, with Boris Johnson perceived as having the most to lose from tonight’s debate.

The market research company, YouGov, are expected to release a post-debate poll which will reflect the favourability ratings of the major parties, and any slip in the Conservative’s lead would weigh on Sterling due to heightened uncertainty ahead of December’s election.

Meanwhile, today saw the release of the CBI industrial survey into industrial orders for November, which fell to -26.

Howard Archer, Chief Economic Adviser at the EY Item Club, was downbeat in his assessment, saying:

‘The report does little to inspire confidence that better times lie just around the corner for manufacturing sector. The November CBI survey still largely indicates a manufacturing sector struggling in the face of soft domestic and foreign demand, and hampered by Brexit, domestic political and global economic uncertainties.’

GBP/USD Outlook: UK Inflation Report Hearings in Focus

US Dollar (USD) investors will be awaiting tomorrow’s Federal Open Market Committee minutes tomorrow, with a dovish comments from the Federal Reserve about the health of the US economy likely to weigh on USD/GBP exchange rate.

Sterling traders, meanwhile, will be paying close attention to tomorrow’s Inflation Report Hearings. Any downbeat comments about the British economy from the Bank of England (BoE) could weaken market confidence in the Pound.

UK political developments will continue to drive the GBP/USD exchange rate, and if Jeremy Corbyn comes out on top in tonight’s head-to-head debate with Boris Johnson, we could see the Conservatives begin to struggle in the polls ahead of December’s election.

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