More downbeat data from the UK high street has left Sterling struggling in today’s early trade, with the Pound to US Dollar (GBP/USD) exchange rate now retesting Friday’s lows. Comments from Federal Reserve board members are poised to bolster the Dollar, assuming there’s more talk of holding monetary policy steady. Meanwhile, the Pound made gains over the Aussie Dollar (GBP/AUD) last night after Australian Business Confidence data illustrated yet more concern over the outlook for the country’s economy.
Disappointing UK Retail Sales Knocks Pound (GBP) Exchange Rate
The release of some disappointing UK Retail Sales Data overnight from the British Retail Consortium (BRC) has left Sterling under a degree of pressure. The British Pound to US Dollar exchange rate (GBP/USD) has lost a quarter of a cent, slumping back towards Friday’s post-payroll lows after the data, which saw June’s like-for-like sales fall 1.6% against expectations of a 1.1% slide, underlined the bleak picture when it comes to consumer spending on the High Street. Despite wage growth outstripping inflation, political uncertainty is putting consumers off making discretionary purchases. Change in Westminster rather than an adjustment in interest rates is necessary to solve this puzzle, although such numbers clearly add to concern over the health of the Pound.
US Dollar Forecast: Federal Reserve Comments in Focus
A series of speeches are due from Federal Reserve board members during today’s session, including Chief Jerome Powell. There’s mounting speculation that after last Friday’s upbeat Non-Farm Payrolls reading, central bankers will be again pushing to seer markets away from the idea that aggressive US interest rate cuts will be seen in the second half of the year. This has the potential to see the Pound to US Dollar exchange rate (GBP/USD) post fresh losses, having only just recovered from last Friday’s run towards lows for the year. Such a strategy does however also risk the Federal Reserve, seeing further criticism from the White House. Any renewed suggestions that the US President may look to replace the Fed Chief could have the potential to initiate a sharp bout of US Dollar selling.
Why Did it Move? Pound to Australian Dollar (GBP/AUD) Exchange Rate
The British Pound to Australian Dollar (GBP/AUD) exchange rate extended the gains seen from the second half of last week, reaching its highest level in almost a week. Pessimism over the lack of progress in US-China trade talks may be driving the agenda here, but the latest move followed the release of some disappointing Business Confidence data overnight. From lows of 1.7850 last week, the cross has traded as high as 1.7990 in recent hours.