Pound US Dollar Exchange Rate Flat ahead of US Data
The Pound US Dollar (GBP/USD) exchange rate is trading in a narrow range so far this morning as investors brace for some high-impact US data later this afternoon.
At the time of writing the GBP/USD exchange rate is trading at around $1.3746, virtually unchanged from today’s opening rate.
US Dollar (USD) to Firm amid Global Growth Concerns?
The US Dollar (USD) may attract support later this afternoon, with the publication of the latest US GDP figures.
Economists are forecasting that the latest preliminary GDP figures will report that US economic growth slowed from 6.7% to 2.7% in the third quarter.
While a weaker US growth reading is unlikely to be welcomed by USD investors, it could actually strengthen the US Dollar.
This is because such a sharp slowing of growth in the world’s largest economy is likely to raise concerns over the wider global economic recovery, which in turn could bolster the appeal of safe-haven currencies such as the US Dollar.
Also likely to prop up the ‘Greenback’ are fresh tensions between the US and China, after the US Federal Communications Commission (FCC) revoked China Telecom’s licence in America, with the FCC citing national security concerns for the decision.
Pound (GBP) to be Undermined by UK-France Fishing Spat?
At the same time, the Pound (GBP) looks to face headwinds this morning, as a spat over fishing rights between the UK and France looks to inflame Brexit tensions.
Anger has been building in France over the past month, following the UK government’s rejection of most applications by French vessels to fish in British waters.
Things have escalated significantly overnight on Wednesday after France seized a British trawler which was reportedly found to be fishing in the Bay of Seine without the correct licences.
France has also warned it may begin blocking British boats from some ports, a move which UK Brexit Minister David Frost called ‘disappointing’.
The fishing spat is likely to cast a shadow over the UK and EU’s attempt to renegotiate the Northern Ireland protocol, with fears that it could derail talks likely to weigh on the Pound amidst fears a failure to reach a new agreement could see the UK government invoke Article 16 which could lead to a trade war between the two sides.
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