The British pound is higher against the US dollar on Monday morning
- President Trump gives ByteDance 90 days to offload its TikTok app
- UK house prices grow for second month
- UK agrees an ‘in principal’ Japan trade deal – Telegraph
- NY Empire State Manufacturing data released later
GBP/USD was up by 16 pips (+0.12%) to 1.3099 as of 10am GMT. Last week the pound finished 0.25% higher over the US dollar.
The currency pair has been moving above and below 1.31 across early trading on Monday following a third straight daily gain on Friday.
GBP: UK looking to Japan trade deal
Sterling continues to consolidate after the two big weekly gains at the end of July over the dollar. Last week the exchange rate rose 0.25% but that followed a -0.28% decline the week prior. In July the dollar index had its worst monthly drop in a decade.
Sterling got a small boost on Monday after reports that the UK was close to agreeing an ‘in principal’ trade deal with Japan by the end of the month. Although there is a long way to go after agreeing the principals, with many small details still to be worked out, it’s still a good first step. One of the arguments for Brexit was that the UK would be able to sign its own bilateral trade deals outside of Europe.
The only economic update today from Britain was that home prices rose 4.6% in August, up from 3.7% y/y in July, helped by pent up demand the temporary removal of stamp duty for house under £500,000.
USD: Trump gives TikTok 90 days
Increasing trade tensions between the US and China have been weighing on the dollar in the past few sessions.
US President Trump added to pressure on Chinese company ByteDance to stop its app TikTok in the United States this weekend, giving it 90 days to sell to a US company. The company is in talks with Microsoft to sell its US TikTok operations. That comes off the back of the President’s previous order to stop US companies dealing with TikTok and WeChat, owned by Tencent within 45 days.
The US and China were supposed to reviewing the implementation of the phase one trade deal this weekend but the talks were delayed last minute.
