GBP/USD: Dollar Soars As Trump Threatens China Tariff Increase

After declining 0.4% versus the US dollar across the previous week, the euro was on the rise as trading started in Asia overnight. The pair closed on Friday at US$1.1079 but was edging marginally higher in early trade on Monday.

Tentative signs that the euro zone economy and particularly the German economy were starting to stabilise helped underpin the euro in the previous week. PMI data was broadly disappointing across the bloc. However, IFO business sentiment data for the final month of the year beat analysts’ expectations, rising to 96.3 from 95.1, whilst the forward looking IFO business expectations rose to 93.8. Stronger business morale is considered a key leading indicator and a sign that the manufacturing crisis in Europe’s largest economy could be bottoming out.

US — China trade developments were also in focus last week. A shortage of details on the agreement and the lack of a signing data unnerved investors. This week the euro will continue to be driven by trade headlines. China has said that it will cut import tariffs on more US products in the latest sign of trade tensions between the two sides dispelling. Signs that the US and China are moving forward with the trade deal and are close to signing the agreed deal would boost hopes of a recovery in the trade reliant German economy. This would in turn support the euro.

US Data Ahead Of Christmas Break

Demand for the US dollar fluctuated across the previous week as investors assessed developments in the US — China trade dispute, President Trump’s impeachment and US economic data.

On Friday the dollar rallied following a barrage of strong data. US GDP data showed that the US economy grew 2.1% year on year in the third quarter. Personal consumption was considerably better than analysts had forecast. Consumer sentiment data also higher lighted the impressive morale in households, supporting the US economy. The data increased investor expectations that the Federal Reserve will not continue to hike interest rates across the coming year.

Trade will remain in focus. There are also a couple of high impacting US data releases ahead of the Christmas break, such as housing starts today and US durable goods data on Tuesday.


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.