The pairing has stabilised as the US dollar safe-haven suffered from renewed risk appetite as the US-China trade talks edge closer towards a deal. Former US Under Secretary of Commerce, Frank Lavin, said the deal was now becoming a “strong likelihood”. Mr Lavin said: “[President Donald Trump] lit the fire… He now has a huge incentive to say… I fixed it.
“It’s now the best trade deal ever. He’ll want to take a few victory laps on this.”
Meanwhile, US dollar traders are anticipating the publication of the US nonfarm payrolls figures for April, which are expected to ease.
These will be followed by the US average hourly earnings figures for April, which are expected to improve.
Although with the US ISM non-manufacturing PMI figures expected to improve for April, we could see the US dollar begin to gain against the pound today.
The pound, meanwhile, has benefited from today’s release of the Markit Services PMI figures for April, which rose out of March’s contraction to 50.4, narrowly missing the forecast 50.5.
Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply, said: “One positive note appears to be the rise in optimism about the future possibly related to the postponement of the Brexit deadline.
“Whether this is triumph of hope over experience, or grim tenacity, the … Brexit fog continues to envelope the UK economy.”
In Brexit news, the Labour Party is apparently trying to ‘bail out’ the Conservatives in an attempt to meet a compromise that will break the current political deadlock between the two parties.
Labour MP Barry Gardiner said: “We are now trying to negotiate with [the Conservatives] because [the] Prime Minister, who’s lost control of her party, who’s lost any chance of getting her deal through Parliament, has had to come to us and say ‘please, I now need to listen to the ideas that you’ve been putting forward.’”
Local election results have shown that the Conservatives and Labour are coming under increasing pressure over their handling Brexit, with the Liberal Democrats and Greens benefiting from the souring of confidence in the two major parties.
Signs of dwindling confidence in the Conservatives has weighed on Sterling sentiment today, with ongoing cross-party talks failing to convince investors of any clear direction for the UK ahead of the European elections.
The pound US dollar exchange rate will be mostly driven by US economic data today, with any signs of an improvement in the US economy likely to knock GBP/USD lower.
Published at Fri, 03 May 2019 10:09:00 +0000