The Pound Sterling to US Dollar (GBP/USD) exchange rate was little moved against the US Dollar on Monday due to the closure of US Markets for the Presidents Day National Holiday.
The Pound Sterling to US Dollar (GBP/USD) exchange rate hit a session high of 1.5441
Against the US Dollar the Pound was trading in the region of a one-month high as sentiment towards the ‘Greenback’ remained soft following the release of softer than forecast US data released last week.
Data released last Friday showed that US retail sales fell unexpectedly last month. According to the Washington based Commerce Department, sales declined by 0.8% last month, adding to the 0.9% decline recorded in the preceding month. The fall marked the first period of consecutive retail sales declines in a number of years.
Also continuing to weigh on the US Dollar was the release last week of the preliminary University of Michigan consumer sentiment index. The index weakened to a reading of 93.6 in February, a drop from the previous month’s final reading of 98.1. Economists had been expecting an unchanged figure.
Sterling meanwhile, continued to find support from last week’s Bank of England inflation report, which suggested that there was no threat of deflation taking root in the UK economy. BoE governor Mark Carney also hinted that interest rates could rise sooner than expected if the fall in prices sparks a strong resurgence in consumer spending.
With a lack of market moving UK data releases and the closure of the US markets for the Presidents Day National Holiday, the GBP/USD exchange rate will likely experience movement as a result of events in Europe, Ukraine and Libya.
European Union Finance Ministers are gathering to discuss the Greece crisis. Economists are doubtful that a deal will be reached regarding the debt-ridden nation’s bailout as both sides continued to hold their ground.
‘It appears unlikely that there will be even a short-term bridge agreement between Greece and the Euro group at today’s meeting, but it is to be hoped that some further common ground can be found,’ said Marc Ostwald of ADM Investor Services.
If no deal is reached today, the US Dollar will likely make gains, as investors seek shelter in safer assets. Greece will run out of cash at the end of the month and if no deal is reached, the nation could go bust and leave the Eurozone.
