In , the pair rallied as the world enjoyed a period of strong economic growth.
British pound daily update
Global economic conditions tend to outweigh the effects of domestic economic conditions within the UK. Our outlook on the British pound remains bearish.
The US dollar is currently mixed against major currencies. While the buck is slightly higher against the Japanese yen and the Australian dollar, the currency is weakening against the euro and the British pound.
Yesterday, the US dollar index a broad measure of the currency surged against most of its peers at the outset of the day. By the end of the day, the dollar had given up more than half of its gains. Trading volumes in US dollar index futures decelerated for the second session in a row - a sign of falling conviction as the dollar approached the top-end of its daily trading range.
Today's US dollar index trading range is Looking at recent price action, the dollar continues to benefit from troubles in Italian bond markets. More specifically, Italian government bond prices have fallen sharply as Italy's government attempts to increase its budget deficit.
As the euro remains weak, the US dollar is rising in relative terms. Specifically, he noted that the US outlook was "remarkably positive". The Fed Chair also said that he sees no impact on inflation following recent US tariffs on Chinese imports. Looking at reactions in markets, Powell's comments led to rising rate hike expectations.
While short-term bond yields move up following his speech, long-term yields moved down in other words, the yield curve flattened. Despite Powell's upbeat comments on the US outlook, long-term bond yields failed to move higher. Thanks to deteriorating growth in Europe and emerging markets, bond markets are skeptical that US growth and inflation will continue to accelerate.
As we have noted in the past, US growth is more likely to begin slowing this quarter following the longest expansion in recorded US history.
Our outlook on the US dollar remains bullish. In our previous piece on pound sterling, we wrote that the currency was likely to weaken thanks to 1 slowing growth across Europe, 2 excessively bullish speculator sentiment and 3 Brexit-related woes. Furthermore, speculator positioning in the pound looked ex…. At the time, we warned that the rally was running out of momentum, but did not see any evidence that would suggest adopting a bearish stance.
Following recent weakness in the British pound, we downgraded our longer-term outlook on the currency to bearish on April 2…. The outlook for the pound, while still bullish, is looking less optimistic today.
More specifically, factors including the ongoing slowdown in regional growth, lower expectations for a May rate hike, and significant speculator interest in the currency are hampering the rally. Following Brexit, the trade-weighted value of pound sterling a measure of GBP relative to other currencies hit an all-t…. In our previous commentary on the US dollar, we wrote that the buck was set to rise further thanks to our forecast for slowing US growth and inflation. Following the publication of our last commentary, the performance of the US dollar index a measure of the currency against major pee….
In our last commentary on the US dollar , we wrote that the buck was set to move higher given underlying economic trends. Specifically, US growth and inflation was likely to keep accelerating, while the opposite was likely to happen in most major regions outside the United States. Phone Number Please fill out this field.
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Please try again later. Upcoming Events Economic Event. The Bank of England decided to raise rates in November but clarified it is a one-off. Mark Carney and his colleagues foresee only two hikes in the next three years. Brexit negotiations were deadlocked for quite some time, but fresh hopes help the pound stabilize. The see-saw will likely continue. Barnier announcement of a special deal sent the Pound shooting higher.
Brexit developments and PMI…. US yields sky rocket to 3. By Yohay Elam on Oct 3, Follow us on Sticher or iTunes.