GBP/USD: Dollar Jumps on Fed's Neutral Stance

The euro US dollar exchange rate is struggling to hold above the key psychological level of US$1.10. The pair is hovering around one-month lows amid persist uncertainty surrounding US — China trade deal and ahead of Federal Reserve Chair Jerome Powell Congressional Testimony.

The euro trended lower across the previous session, paring gains from Monday. The euro has already shed over 1.2% versus the US dollar so far this month. The euro headed southwards despite an improvement in German sentiment. Data showed that German investor sentiment jumped by more than what analysts had expected in November. Optimism following progress in the US — China trade dispute combined with an improved international economic environment helped boost sentiment. However, the euro shrugged off the stronger than forecast numbers.

German inflation was also inline with analysts forecasts at a lacklustre 1.1% in October. With inflation so far from the European Central Bank’s 2% target, the central bank could be forced to cut rates again. The prospect of loser policy is weighing on demand.

Investors will now turn their attention to eurozone industrial production figures, which could drag on the common currency. Analysts predict industrial production declined -0.2% month on month in September, well short of the 0.4% increase in the previous month. On an annual basis, industrial production is expected to have declined -2.3%.

Trump Touched Briefly On Trade

The dollar was broadly in favour across the previous session. Investors focused on a highly anticipated speech by President Trump at the Economics Club of New York. Investors were particularly keen to hear Trump’s take on progress in US — Chinese trade talks. However, whilst Trump touched on international relations, he refrained from giving concrete declarations about the outlook of a phase one trade deal. Trump said that a deal could come soon. That was sufficient to lift US stock markets to fresh record highs, boosting the demand for dollars.

Today dollar investors will switch their attention to Federal Reserve Chair Jerome Powell. With two speeches from the two most important figures in the US for the dollar, some volatility would be on the cards. Jerome Powell will testify before Congress on the state of the US economy. A cautious sounding Powell could drag the dollar lower.

What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 EUR = 1.12829 USD

Here, €1 is equivalent to approximately $1.13. This specifically measures the euro’s worth against the dollar. If the U.S. dollar amount increases in this pairing, it’s positive for the euro.

Or, if you were looking at it the other way around:

1 USD = 0.88789 EUR

In this example, $1 is equivalent to approximately €0.89. This measures the U.S. dollar’s worth versus the euro. If the euro number gets larger, it’s good news for the dollar. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.