{"id":3970,"date":"2017-10-04T00:00:00","date_gmt":"2017-10-04T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100168-gbp-usd-uk-construction-fed\/"},"modified":"2017-10-04T00:00:00","modified_gmt":"2017-10-04T04:00:00","slug":"100168-gbp-usd-uk-construction-fed","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100168-gbp-usd-uk-construction-fed\/","title":{"rendered":"GBP\/USD: Pound Reeling From UK Construction Data, Will Fed Speech Toda"},"content":{"rendered":"<p>The pound US dollar exchange rate continued to weaken for sterling on Tuesday. The pound fell a further 0.2% against the US dollar taking the rate to US$1.3235. The pound has lost just shy of 3% versus the US dollar in the last 3 weeks.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> 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. <\/p>\n<p> For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <\/p>\n<p> <em>Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the US dollar amount increases in this pairing, it\u2019s positive for the pound.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <\/p>\n<p> <em>In this example, $1 is equivalent to approximately \u00a30.78. This measures the US dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>A slew of weak UK economic data has kept the pound depressed. Friday\u2019s GDP showed that the UK economy grew slower than analysts had forecast in the second quarter. Monday\u2019s UK manufacturing data showed that momentum was slowing in the sector. Finally, Tuesday\u2019s construction data showed that the sector shrank for the first time in 13 months as Brexit continued to impact sentiment. Concerns over the future have weighed on business confidence and, as a result, many firms are holding off on new commercial building contracts. New orders in the sector are also down, suggesting that the picture could get worse before it improves. The unexpected contraction of the construction sector sent the pound lower.<\/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<p>Today sees the focus switch to the UK service sector. This is by far the most important sector for the UK economy, given it accounts for over 70% of economic activity. A slowdown in the service sector would point to a slowing of momentum for the UK economy as a whole. Should this be the case, then the pound could continue to move lower.<\/p>\n<h2><a href=\"#will-us-fed-reserve-chair-yellen-send-the-dollar-higher-\" name=\"will-us-fed-reserve-chair-yellen-send-the-dollar-higher-\"><\/a>Will US Fed Reserve Chair Yellen send the dollar higher?<\/h2>\n<p>With little highly influential data to digest on Tuesday, the dollar slipped against most of its major peers except the pound. However, today looks set be a busy day for the buck. Firstly, there is economic data in the form of non-manufacturing purchasing managers index and private employment payroll numbers. The employment numbers are often used as a guidance for Fridays\u2019 Labour Department numbers, the most important data piece in the US economic calendar.<\/p>\n<p>Secondly, Federal Reserve Chair Janet Yellen will speak. Last week, the last time Yellen spoke, she seemed very in favour of another interest rate hike before the end of the year. Her speech ultimately boosted the dollar as the odds of an interest rate increased. Investors will be watching closely for any further hints as to the possibility of another rate rise this year. Further commentary in that direction could send the dollar rallying higher.<\/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>The pound US dollar exchange rate continued to weaken for sterling on Tuesday. The pound fell a further 0.2% against the US dollar taking the rate to US$1.3235. The pound has lost just shy of 3% versus the US dollar in the last 3 weeks. What do these figures mean? When measuring the value of [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3971,"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-3970","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>GBP\/USD: Pound Reeling From UK Construction Data, Will Fed Speech Toda - 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\/100168-gbp-usd-uk-construction-fed\/\" \/>\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\\\/100168-gbp-usd-uk-construction-fed\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100168-gbp-usd-uk-construction-fed\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Reeling From UK Construction Data, Will Fed Speech Toda\",\"datePublished\":\"2017-10-04T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100168-gbp-usd-uk-construction-fed\\\/\"},\"wordCount\":853,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100168-gbp-usd-uk-construction-fed\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100168-gbp-usd-uk-construction-fed.jpg\",\"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\\\/100168-gbp-usd-uk-construction-fed\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100168-gbp-usd-uk-construction-fed\\\/\",\"name\":\"GBP\\\/USD: Pound Reeling From UK Construction Data, Will Fed Speech Toda - 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