British Pound Still Weak Whilst Dollar Shows No Sign Of Stopping
The euro was pushing slightly lower against the US dollar in morning trading, the single currency being affected by the terrorist attacks that have hit Paris over the weekend. The events of this weekend could have a greater economic impact on tourism and consumer spending over the weeks running up to the end of year celebrations.
There is a very real threat of current events pushing France back into recession, which could ignite new ECB intervention. France is the second largest economy in the Eurozone.
GBPUSD closed down slightly on Friday’s session at $1.5227 and put to an end four consecutive gains. While the Britsh Pound has been expanding since the reported decline of unemployment rates in the middle of last week, the US dollar is pushing stronger too.
Since being hit with pressure after the release of weaker than expected retail sales, the US Dollar quickly regained most of the losses and bounced on the release of the confidence index from the University of Michigan.
So far today, the pair has continued looking weak, with traders anticipating a future rate hike from the Federal Reserve. The market will, however, be watching the release of the Empire index of US manufacturing activity in November, which could end up creating whipsaws with the release of inflation figures in the United Kingdom and the United States.
For those looking to transfer money to another country, the GBP exchange rate remained in a tight trading range. A break beyind the lows of current prices could send the rate down to $ 1.5165 and then at $ 1.5115.
Since the falls on Guy Fawkes evening, GBPUSD has formed a small bounce from the lows of 1.5028, which are a key support moving foward into holiday season. A break below, could see a very sharp declines downwards to the lows not seen since April 2015, when the pair hit 1.4600. This was one of the lowest points since 2010, and would certainly give way to further speculation on whether the time is right for an interest rate hike from BOE.