Pound to US dollar rates have been strengthened after the publishing of improved UK GDP figures.
UK GDP figures
The latest set of UK Gross Domestic Product (GDP) figures made for positive reading, with the UK economy rebounding in the first quarter of 2019.
Growth of 0.5% for the first three months of the year, showed a marked improvement from the previous figures, up from 0.2% in the last three quarters of 2018.
This increase will of have come as a welcome relief for those clients with a short-term GBP/USD requirement, with the pound finding support against the greenback above the key threshold of 1.30.
Whilst it has failed to make any aggressive moves beyond this level following its decline earlier this week, clients holding the pound would have been concerned with its recent downturn, which has coincided with the current stalemate in Brexit talks between the Conservative & Labour.
Brexit cross party talks
UK Prime Minister Theresa May instigated the talks with Labour leader Jeremy Corbyn, in the hope they would breakthrough the Brexit standoff, which has threatened on more than one occasion to destabilise sterling’s value.
The pound had seen its value increase further earlier this week against the USD, due to what was an apparent breakthrough regarding the contentious issue of the customs union arrangement post-Brexit. Unfortunately for those clients looking to exchange GBP into USD, subsequent reports reaffirmed the markets belief that any prospective agreement was still some way off. As a result, the pounds value dipped sharply as investors sold off their GBP positions in haste, before seeing a recovery back to the current levels following Friday’s positive UK GDP data.
US China trade war & inflation figures
Looking at the US economy and concerns about a breakdown in talks between the US & China over the current trade stand-off intensified yesterday, following US President Donald Trump’s decision to double some of the existing trade tariffs on Chinese imports.
This apparent provocative move will likely lead to a similar retort by the Chinese government, which will cast further doubt over the global markets. This could lead to investors moving their funds into the USD, which is always used as a currency of choice in times of global economic uncertainty.
Add to this US inflation figures showing an upturn to 2.1% in April and it is likely this improvement will be enough to keep the US Fed form cutting interest rates at their next policy meeting.
With the US economy continuing to show no real signs of the predicted downturn this year, the pound may find life slow going against a strong and well supported USD over the coming days and beyond.
If you have an upcoming pound to us dollar transfer or would like to hear more about current exchange rates, please feel free to contact me directly using the form below.