pound us dollar

The pound US dollar exchange rate is at $1.424 at the present time

This is a step down from last week’s closing pound US dollar high of $1.428.

The main source of support for the pound has been some optimistic forecasts for UK wage growth levels in February, which have been upgraded compared to last week’s predictions.

So far today, there has been little high-impact UK data to influence demand for the pound.

The British Retail Consortium (BRC) has reported that shopper footfall suffered the largest year-on-year drop in March since late 2010.

This has not been seen as an especially negative announcement, given that customers who are not physically entering shops could still be supporting the retail sector with online purchases.

Elsewhere today, Prime Minister Theresa May is expected to make her case for taking part in a coordinated missile strike against Syria over the weekend.

Opposition MPs are still likely to question why Mrs May acted without first obtaining approval.

The United States, which led the attack, has seen its currency weakened since the incident due to trader uncertainty.

President Donald Trump tweeted “mission accomplished” after the strike against Syrian targets supposedly involved in the production of chemical weapons.

Despite this optimism, there is still the overhanging threat of retaliation by either Syria or its allies, such as Russia or Iran.

Speaking in the aftermath of the military action, Russian Ambassador to the US Anatoly Antonov said: “All the responsibility for these consequences will fall on Washington, London and Paris.” 

Sentiments such as this are likely to unnerve investors.

As mentioned above, economists tomorrow are likely to predict that the pace of UK wage growth will be reported to have accelerated, which could lead to a GBP/USD exchange rate rally.

Economists had previously forecast that UK wage growth might slow, so this positive outlook has already contributed to some of today’s GBP gains.

Assuming that fears about fresh military action in the Middle East fade today, the US dollar might appreciate when retail sales data for March is released this afternoon.

For both the month-on-month and year-on-year readings, levels of retail sales activity are forecast to rise.

Such results could trigger a minor US dollar pound recovery.

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