On Monday, the GBP/USD exchange rate remains comfortably above the 1.3300 handle. This stability arrives while the US Dollar has hit some pause on its new bull run. For the first time in years, the greenback’s advance has all but entirely stopped. This change of pace comes as the US-China trade conflict has managed to stay quiet, providing good news for GBP/USD.
So as the trading day goes on today, GBP/USD has nicely reclaimed the 1.3300 level, a sign of confidence building among traders. The strength of the US Dollar has been on a bias recently as activity has stalled from reduced buying demand. Consequently, the British pound is today’s dark horse. Analysts note that the currency pair has firmly defended itself above this key level. Completion of this project could be an early indicator that the mood of the market is changing.
The USD and GBP/USD pair USD correlation is multifaceted, shaped by several key economic indicators and geopolitical factors. The current pause in the US Dollar’s advance comes at a time when traders are closely monitoring global economic conditions. The absence of fresh developments regarding the US-China trade tensions has provided a stabilizing effect on the foreign exchange market.
Additionally, economists insist that this week’s most important data releases will be key for both dollars and pesos. New economic reports coming in over the next two weeks will help provide clearer perspective on inflation trends and employment numbers. These three key metrics could profoundly change market dynamics. On balance, these data points should weigh on trader expectations and thus drive volatility in both GBP and USD valuations.
Market participants continue to be skittish as they wait for these big reveals. The combination of economic data releases and geopolitical matters will continue to be the key in defining directions ahead for GBP/USD. With traders gauging the overall impact of data releases, surprises have the potential to create increased volatility for currency exchanges.