- Pound (GBP) advances as investors move past Brexit concerns
- CBI distributive trends in focus
- US Dollar (USD) under pressure as investors look for riskier assets and currencies
- US consumer confidence expected to rise but remain below June’s reading
The Pound US Dollar (GBP/USD) exchange rate is pushing northwards, snapping a two day losing streak. The pair settled on Monday -0.23% at US$1.3063, towards the lower end of the daily traded range. At 06:15 UTC, GBP/USD trades +0.3% at US$1.3106.
Investors are looking past last week’s Brexit talks, which had weighed on the Pound. The 7 round of trade talks between the two sides resulted in little if any progress towards a trade deal. Failure for the two sides to agree would mean the UK would leave the EU in December on unfavourable World Trade Organization rules.
There is little out there for Pound investors to grab onto. A broad upbeat mood in the market is lifting sterling as investors look ahead to Confederation of British Industry Distributive trends data. This is expected to show an 8% jump in August after a 4% increase in July.
The US Dollar is slipping lower on Tuesday versus its major peers, paring gains from the previous session amid an upbeat mood in the market.
Renewed dialogue between US and China over trade has injected optimism surrounding the Phase 1 trade deal. Coronavirus vaccine and treatment developments are also adding to the upbeat mood which is driving investors towards riskier assets and currencies and away from the safe haven US Dollar.
Looking ahead the US consumer confidence figures and second tier home sales data will be in focus and provide some impetus.
Consumer confidence is expected to rise marginally in August after easing back in July as morale attempts to recover following the second wave of coronavirus which started in June. The Conference Board Index consumer confidence index is expected to be 93 in August, still down from 98 in June.
Confident consumers often spend more so an uplift in morale is considered good news for an economy and its currency.