GBP/USD – Mild selling pressure for the currency pair GBP/USD on Friday, keeping it slightly above the 1.3300 level. The current dollar shortage, fueled by the recent resurgence in demand for the US dollar, is causing this decline. Further positive policy developments in the unfolding US-China trade conflict are stoking this demand. In reaction, GBP/USD was on the back foot in the low-1.3300s.
Market pundits have pointed to all of this as evidence that the Greenback is strengthening. This trend is driven by recent headlines with new signs of a softening of US/China rhetoric. The market has clearly cheered these changes, making the dollar more attractive to investors. Traders are happily welcoming back Greenback’s cool, calm and collected self. This change is adding great downward pressure on GBP/USD value as they realign their positions with shifting market sentiment.
While GBP/USD steadily moved downward, there was a silver lining in the form of UK retail sales beating forecasts. Expectations of a rate hike in Britain kicked up after much stronger-than-expected retail sales figures and bolstered the British pound. They were not able to break through the overall selling pressure across the market. UK consumer spending displays remarkable resilience. This trend could play a key role in determining the winners—and losers—of tomorrow’s markets.
As the trading day progressed, GBP/USD mainly contended with a volatile market. Domestic and international factors continued to push the volatility. Analysts will be watching closely as they track what happens with the ongoing US-China trade saga, which may add more volatility to currency movements. It’s always important for traders to key in on next week’s economic releases and any geopolitical developments that could affect market landscape.