{"id":3884,"date":"2017-08-08T00:00:00","date_gmt":"2017-08-08T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/10088-gbp-usd-close-to-dollar\/"},"modified":"2017-08-08T00:00:00","modified_gmt":"2017-08-08T04:00:00","slug":"10088-gbp-usd-close-to-dollar","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/10088-gbp-usd-close-to-dollar\/","title":{"rendered":"Pound Drops Dangerously Close to $1.30 Versus the Dollar"},"content":{"rendered":"<p>Whilst the dollar is looking weak, the pound is looking weaker. On Monday the pound fell to a low of $1.3014, in a sharp sell off, with no clear trigger. The pound US dollar exchange rate then pushed higher as the dollar weakened following cautious comments from Federal Reserve Official Bullard.<\/p>\n<p>On Monday, the pound US dollar exchange rate dropped beyond the lows hit the previous week after Bank of England disappointed the markets. Sterling has been unable to mount any meaningful recovery since the British central bank cut its growth outlook for the UK economy and shifted towards a more \u201cdovish\u201d stance, less inclined to raise interest rates.<\/p>\n<p>News that the UK housing market has slowed modestly did little to improve sentiment for the pound. Currency traders aren\u2019t interested in house prices, but a modest slowdown in the market highlights growing concerns over consumer confidence. When consumers feel less certain and confident about the future, they tend to rein in their spending. This is bad news for the UK economy, which depends so heavily on consumer spending.<\/p>\n<p>Next up traders will shift their attention towards retail sales figures from the British Retail Consortium (BRC). These figures will provide another clue to the markets as to whether consumers are still spending, as the cost of living pushes higher and wages fail to keep up. Analysts have pencilled in a 0.6% increase in the value of retail sales for the year in July, this is a decline from the previous month\u2019s 1.2% rise. Should the BRC retail numbers show that households are holding back on spending, then the pound could wipe out yesterday evening\u2019s gains as the outlook for the UK economy continues to darken.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does poor economic data drag on a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Slowing economic indicators point to a slowing economy. Weak economies have weaker currencies because institutions look to reduce investments in countries where growth prospects are low and then transfer money to countries with higher growth prospects. These institutions sell out of their investment and the local currency, thus increasing supply of the currency and pushing down the money\u2019s worth. So, when a country or region has poor economic news, the value of the currency tends to fall. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<h2><a href=\"#federal-reserve-official-bullard-says-rates-are-fine-as-they-are\" name=\"federal-reserve-official-bullard-says-rates-are-fine-as-they-are\"><\/a>Federal Reserve Official Bullard says rates are fine as they are<\/h2>\n<p>The recent dollar rally ran out of steam rather quickly. Better than expected US jobs data on Friday boosted the dollar. However, even as the new week began investors were showing signs of doubt as to whether the strong data would transfer across into a faster pace of interest rate hiking from the Federal Reserve. Whilst most investors are looking out to inflation data due on Thursday and Friday, Federal Reserve Official Bullard successfully dashed hopes of a hike in the near term. Bullard clearly stated that the Federal Reserve has no reason to raise rates in the near term. As the odds for an interest rate increase fell, so did the value of the dollar.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Whilst the dollar is looking weak, the pound is looking weaker. On Monday the pound fell to a low of $1.3014, in a sharp sell off, with no clear trigger. The pound US dollar exchange rate then pushed higher as the dollar weakened following cautious comments from Federal Reserve Official Bullard. On Monday, the pound [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3885,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1398],"class_list":["post-3884","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gbp","category-usd","tag-gbp","tag-usd"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pound Drops Dangerously Close to $1.30 Versus the Dollar - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/10088-gbp-usd-close-to-dollar\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/10088-gbp-usd-close-to-dollar\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/10088-gbp-usd-close-to-dollar\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Pound Drops Dangerously Close to $1.30 Versus the Dollar\",\"datePublished\":\"2017-08-08T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/10088-gbp-usd-close-to-dollar\\\/\"},\"wordCount\":760,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/10088-gbp-usd-close-to-dollar\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/10088-gbp-usd-close-to-dollar.png\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/10088-gbp-usd-close-to-dollar\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/10088-gbp-usd-close-to-dollar\\\/\",\"name\":\"Pound Drops Dangerously Close to $1.30 Versus the Dollar - 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