Update: The Pound to US Dollar (GBP/USD) exchange rate began falling in the Thursday afternoon European session when US Durable Goods Orders took a surprising turn. Economists had forecast a drop from a positively revised 4.6% in August to -1.5% in September. However, the actual print came in at a more positive 0.8%. Additionally, US Pending Home Sales printed at 0.05% in September on the year, after August’s -2.5% contraction. The forecast had been for a flat 0.0%. The Pound to US Dollar (GBP/USD) exchange rate is trending in the region of 1.2841 with the potential to soften further.
The Pound to US Dollar (GBP/USD) exchange rate has spent the morning climbing, trading between levels of 1.2878 and 1.2919. The Sterling exchange rate gained some favour after British Prime Minister Theresa May fended off a potential leadership challenge when she addressed the 1922 committee last night.
GBP/USD Falls Through 1.29, Thursday See’s Pound Climb
The GBP/USD exchange rate broke below the 1.2900 barrier yesterday as the US Dollar strengthened and Brexit negotiations weighed on the British currency.
The successful showdown seemed to get ministers on her side as she moves forward with Brexit negotiations, quelling recent rumours that a leadership challenge could be imminent. The move gave the Pound a reason to be a little more buoyant after recent Brexit disappointments.
Meanwhile, the rest of the week is quiet for UK domestic data, leaving political developments and general market sentiment the drivers for today’s Pound Sterling exchange rate movement.
US Dollar Exchange Rate Awaits Trade Balance and Durable Goods Orders
On the US economic calendar today, the Advance Goods Trade Balance will be out, alongside the US Durable Goods Orders figure. Both pieces of data are high-tier and could significantly impact US Dollar sentiment and the way the USDGBP exchange rate trades.
Friday could be another big day for the USD/GBP exchange rate with the release of the third quarter annualised Gross Domestic Product (GDP) reading. Economists have forecast a decline from 4.2% to 3.4% on the quarter which could create some pressure on the US Dollar.
Stock market volatility has also come to the forefront today. JP Morgan’s Kerry Craig commented on the recent stock market selloff which is gaining pace today, saying:
‘There are many symptoms but no one can diagnose the illness. Geopolitics, rising bond U.S. bond yields, a more hawkish looking U.S. Federal Reserve (the Fed), slowing Chinese growth, a strong U.S. dollar and the already well-known problems in some emerging economies have all contributed to the market unease.’
Investors will be turning their attention to the upcoming G20 meeting. However, a resolution between the US and China is unlikely to be met at the gathering.
The Pound to US Dollar (GBP/USD) exchange rate is trading at 1.2894.