Will the Dollar improve against the Pound?
The US dollar has continued to gain strength against the pound this week. In the next few days the G20 summit is due to take place in Osaka, with the event including the 20 leaders from the strongest nations.
This will be the first occasion when Trump will be meeting Chinese Premier Xi Jinping since the talks broke down in May.
The US-China trade war has been going on for over a year and this is causing problems for both economies. However, as the dollar is used as a safe currency when geo-political tensions are high, the US dollar tends to strengthen.
If Jinping and Trump manage to improve the situation then this could cause movement for GBP/USD exchange rates. A deal between the two countries could be welcome news for the US but I think it is the uncertainty concerning global tensions that is keeping the US dollar strong against both the euro and the pound.
US and UK GDP Data in focus this week
Tomorrow afternoon brings with it the latest US GDP figures for the first quarter. These are the revised figures so anything different from the expectation of 3.1% could cause movement for the US dollar. Therefore, if you’re in the process of making a currency transfer involving dollars then pay close attention to the data.
Turning the focus back to the UK and we end the week with UK GDP tomorrow morning. The expectation is for 1.3% and with the uncertainty caused by Brexit if this is lower this could see the pound fall even further towards the end of the week.
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