Pound v US dollar: GBP exchange rate drops – declining from previous weekly high
THE POUND to US dollar exchange rate has seen a small decline today, lowering the exchange rate to the region of $1.417.
This puts the pound closer to its weekly opening exchange rate against the US dollar.
It marks a clear decline from the weekly high of $1.423 seen yesterday.
Despite this deterioration, elsewhere the pound has risen by 0.3 per cent against the Australian dollar and has seen positive movement against a number of other peers.
There still has not been any notable UK economic data releases this week, so the pound has been influenced by the latest Brexit news.
Experts at the London-based Economist Intelligence Unit (EIU) have predicted that even with the transitional deal in place, UK real GDP growth could take a hit over the next four years.
The EIU estimates that GDP growth will struggle to hit 1.5 per cent in 2018, falling to 1.4 per cent in 2019 before recovering to 1.8 per cent between 2020 and 2022.
On the plus side, the company has predicted that London will retain its status as a hub for global financial activity, even with some large companies heading to the continent.
Over in the US, the US dollar has been in high demand today, resulting in moderate gains against the Australian dollar and South African Rand.
The US currency has firmed on growing hopes that a US-China trade war might be avoided, following reports that representatives of both nations are discussing the issue.
It has been widely theorised that both nations could be damaged by the tariffs proposed by President Donald Trump, but that losses could be minimised through compromise.
Further optimism has been generated by the news that North Korean leader Kim Jong-un has ventured outside his country and met with officials in China.
There are hopes that this could be the start of a reconciliation with the US, potentially leading to the trade war and nuclear conflict issues both being dealt with simultaneously.
Getting back to the UK, the pound may advance against the US dollar in the near-term when Confederation of British Industry (CBI) trading data is released shortly.
Estimates are for a rise in the reading from 8 points to 11, potentially triggering a GBP/USD advance.
The US dollar may drop sharply this afternoon, if Q4 GDP growth rate figures show a slowdown, as expected.