Over the past week the Pound has lost over 1.5% against the Dollar with the pairing witnessing political uncertainty and poor economic for the UK and positive news on trade talks between the US and China.
Pound Sterling forecast: The Pound’s value continues to drop
The Pound’s value has fallen across the board in the past few weeks as investors and speculators alike avoid Sterling until there is a much clearer path and picture ahead. It is quite understandable that Sterling is dropping. Although it does look likely that Boris Johnson will be taking the reins we still do not now what the plan is and how Brexit may work out.
The chance of a ‘no deal’ Brexit is ever so slightly increasing as we head closer to the next deadline of October 31st and this is giving the markets the jitters once more.
Economic data has been fairy poor as well over the last few weeks as much of the country appears to be holding back and waiting to see what happens with Brexit. This is leading to fewer business decisions being made, businesses and individuals taking precautions and the housing market and retail sector slowing.
Positivity for the US / China trade deal helps the Dollar
If you look at the US and the Dollar, Donald Trump’s progress with a possible trade deal with China has been taken positively by the market and the US economy is still performing reasonably well, although overall growth has slowed a little.
There had been talks of a possible interest rate cut in recent times which had weakened the Dollar a little. One of the key factors and economic data releases that may impact that decision is Non Farm payroll data which is released on Friday afternoon.
This measures the number of people in non-agricultural employment in the US and can be a good measure of economic performance. Analysts can predict this figure incorrectly so the market often moves quite quickly to correct itself, this can cause Dollar volatility.
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