GBP/USD Exchange Rate Slumps amid Cautious Trade
The Pound US Dollar (GBP/USD) exchange rate slumped today as risk appetite soured. With data thin on the ground this week, movement could remain volatile.
At the time of writing the GBP/USD exchange rate is trading at around $1.2307, down approximately 0.3% this morning’s opening rate.
Pound (GBP) Retreats Ahead of GDP Data
The Pound (GBP) shed its recent wins this morning as cautious trade prevented the increasingly risk-sensitive currency from edging higher against its safer peers.
GBP retreated from recent highs overnight, as surges sparked by the Bank of England’s (BoE) hawkish rate hold settled. Dwindling investor interest leaves Sterling vulnerable to external factors in the absence of notable UK data.
Looking ahead, Friday’s release of UK GDP figures is likely to drive GBP volatility. The highly influential quarterly GDP growth rate may see Sterling face heavy selling pressure, with a forecast reading of -0.1%. Should growth in the third quarter print as expected, declining from the second quarter’s 0.2%, UK recession fears could see the Pound plummet.
Ongoing signs of a UK economic slowdown may see GBP end the week on a dismal note, with investors hesitant to place any aggressive bets in the meantime.
US Dollar (USD) Ticks Up as Market Mood Sours
The US Dollar (USD) is rallying today as risk aversion pushes anxious investors towards the safe-haven currency.
This morning’s bleak Chinese trade data looks to have caused a spell of jittery trade, as investors dash to safer currencies amid fears of global economic weakness, underpinning USD.
Coming up, the ‘Greenback’ could see a choppy week of trade ahead, with the release of further US employment data. Concerns of a weakening labour market off the back of last week’s disappointing non-farm payrolls could be reinforced, should the latest jobless claims data print in line with forecasts.
Initial jobless claims for the week ending 4 November are expected to tick up marginally, from 217,000 to 218,000. Gradual increases in emerging US unemployment may point to a steadily loosening labour market, driving concerns that the US economy is slowing after a strikingly robust year.
Also due out on Thursday is continuing jobless claims data. A forecast uptick in the number of US citizens claiming ongoing benefits may also serve to highlight declining US employment, thereby denting USD.
Comments are closed.