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US Dollar Weakened by Doubts over Trump’s Tax Reforms

Categories: AUD, CAD, EUR, GBP, Markets, News, NZD, USD

Sterling


GBP/USD 1 Week Chart

The Pound’s (GBP) recent recovery was supported by the release of the UK’s latest manufacturing production figures yesterday as output held at 0.4% in August, beating expectations it would fall to 0.2% and offsetting an unexpected rise in Britain’s trade deficit.

Also aiding Sterling was NIESR’s latest UK GDP estimate, with the thinktank predicting that British economic growth will rise to 0.4% in the third quarter, a slight acceleration from 0.3% in the previous quarter.

Looking ahead, a fairly quiet week for UK data will likely see markets focus on the fifth round of Brexit talks, with any suggestions that progress remains slow likely to cause the Pound to weaken.

Euro

The Pound Euro (GBP EUR) exchange rate began to retreat in early trade this morning as Catalan leader Carles Puigdemont delayed the implementation of his independence declaration, allowing for more time for talks between the Catalan and Spanish governments.

This built on upbeat German data released on Tuesday which showed that exports from the manufacturing powerhouse boomed in August.

US Dollar

Sterling remained steady against the US Dollar (USD) in overnight trade on Tuesday as doubts over Trump’s ability to implement tax reforms weighed on the ‘Greenback’.

Markets fear that infighting within the Republican Party may hamper the President’s attempts to push through his tax changes, with a growing feud between Trump and Tennessee Senator Bob Corker being particularly concerning.

Meanwhile, USD investors will be focused on the release of the minutes from the Federal Reserve’s latest policy meeting today, with markets hoping that the accounts will reveal more about the bank’s policy plans and whether a December rate hikes is as likely as analysts predict.

Canadian Dollar

The Pound Canadian Dollar (GBP CAD) exchange rate pushed higher again on Tuesday as a larger than expected decline in new building permits issued in August suggests that Canada’s housing market may be slowing at a faster pace than expected.

Australian Dollar

Sterling was forced to cede some ground against the Australian Dollar (AUD) overnight on Tuesday as Australia released its latest Consumer Confidence data, with the index jumping from 97.9 to 101.35 in October, the first positive survey in almost a year.

New Zealand Dollar

After briefly dipping in the Asian session last night, the Pound New Zealand Dollar (GBP NZD) exchange rate returned to trading close to its best levels this week as political uncertainty continues to weigh on the ‘Kiwi’.

TorFX Author: TorFX

“Our company’s mission is to provide outstanding exchange rates, expert guidance and a simple, friendly service that people will want to recommend to others.” – Jon Beddell (CEO). Contact TorFX for an FX Quote – UK & Europe – Australia & NZ.

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product. Full Disclaimer

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