{"id":4056,"date":"2017-11-07T00:00:00","date_gmt":"2017-11-07T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100216-gbp-usd-uk-gdp-numbers\/"},"modified":"2017-11-07T00:00:00","modified_gmt":"2017-11-07T05:00:00","slug":"100216-gbp-usd-uk-gdp-numbers","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100216-gbp-usd-uk-gdp-numbers\/","title":{"rendered":"GBP\/USD: Will UK GDP Estimate Help The Pound Continue Its May Inspired"},"content":{"rendered":"

The pound started the week gaining back some of its losses from Thursday\u2019s heavy sell off. The pound gained 0.6% in value versus the US dollar on Monday, hitting a day\u2019s high of US$1.3175 for the pound. However, this is still 1% lower than where the pound was trading mid last week, albeit 0.3% higher than where the pound started last week.<\/p>\n\n\n\n\n\n
What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n
\n

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

For example, it could be written: 1 GBP = 1.28934 USD<\/em> <\/p>\n

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

Or, if you were looking at it the other way around: 1 USD = 0.77786 GBP<\/em> <\/p>\n

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

The pound was rebounding from last week\u2019s Bank of England (BoE) inspired sell-off. Despite the central bank hiking interest rates in the UK, it gave the impression that the next hike would not come for a long time. This weighed heavily on demand for sterling.<\/p>\n\n\n\n\n\n
Why do raised interest rates usually boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n
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

On Monday, the mood for the pound improved following a speech from UK Prime Minister Theresa May at a Confederation of Business Industry (CBI) Conference in London. The CBI is an organization that acts as a voice for over 190,000 businesses in the UK. Theresa May used the opportunity to discuss her outlook and intentions regarding Brexit. May assured her audience that the government was seeking a transition period in her negotiations with EU leaders, knowing the damage which could be caused by a cliff-edge or hard Brexit. She also struck an optimistic tone highlighting the opportunities that could stem from Britain\u2019s departure from the European Union. Pound investors interpreted May\u2019s speech as positive, which drove demand for the pound higher.<\/p>\n\n\n\n\n\n
Why is a smooth Brexit good for the pound? <\/th>\n<\/tr>\n<\/thead>\n
A smoother Brexit would be a scenario in which the economic consequences of leaving the European Union are minimised. This is favourable for the pound because the less the Brexit impact on the economy, the more likely that foreign investors will remain interested in the UK. Foreign investors need sterling to invest in the country and so the more GBP is purchased, the higher the demand and, thus, an increase in the currency\u2019s value. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n

Brexit will continue to remain in focus as the week moves forward, as another round of Brexit negotiations are due to start on Thursday.<\/p>\n

On the UK economic calendar for today, pound traders will look forward to the release of UK retail sales data by the British Retail Consortium (BRC), which could provide an important insight into consumer spending habits. Also, Halifax house prices are due for release, in addition to the National Institute of Social & Economic Research (NIESR) GDP estimate.The Halifax house price index is UK\u2019s longest running, and highly regarded source of information about house prices. The NIESR gives a quarterly estimate of the growth in UK economy using advanced statistical techniques. Both these datasets are important indicators of UK\u2019s economic health and therefore a good result could help raise the value of the pound.<\/p>\n

<\/a>US Federal Reserve Overhaul Continues<\/h2>\n

The US Federal Reserve remained in the news at the beginning of the week after Federal Reserve monetary policy maker, William Dudley, announced that he would retire half way through 2018. Depending on who will replace him, this move could have implications on monetary policy and, as a result, the US dollar. One possible candidate is Kevin Warsh, who was also in the running to replace Fed Chair Janet Yellen. Warsh is known to be more in favour of aggressive interest rate rising, so should he be selected he could shift the balance in the Fed towards a more hawkish<\/a> stance.<\/p>\n

On Thursday last week, President Trump announced that Jerome Powell\u2019s nomination to replace Janet Yellen as Federal Chair. Analysts believe that Powell will continue along the same policy path that Yellen set. A path which has been characterised by small incremental rate rises since December 2015.<\/p>\n\n\n\n
\n


\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 risk warning<\/a> page for more details.<\/em><\/small><\/p>\n

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":"

The pound started the week gaining back some of its losses from Thursday\u2019s heavy sell off. The pound gained 0.6% in value versus the US dollar on Monday, hitting a day\u2019s high of US$1.3175 for the pound. However, this is still 1% lower than where the pound was trading mid last week, albeit 0.3% higher […]<\/p>\n","protected":false},"author":163946597,"featured_media":4057,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1398],"class_list":{"0":"post-4056","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"category-usd","9":"tag-gbp","10":"tag-usd"},"acf":[],"yoast_head":"\nGBP\/USD: Will UK GDP Estimate Help The Pound Continue Its May Inspired - 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\/100216-gbp-usd-uk-gdp-numbers\/\" \/>\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=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100216-gbp-usd-uk-gdp-numbers\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100216-gbp-usd-uk-gdp-numbers\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Will UK GDP Estimate Help The Pound Continue Its May Inspired\",\"datePublished\":\"2017-11-07T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100216-gbp-usd-uk-gdp-numbers\\\/\"},\"wordCount\":990,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100216-gbp-usd-uk-gdp-numbers\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100216-gbp-usd-uk-gdp-numbers.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\\\/100216-gbp-usd-uk-gdp-numbers\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100216-gbp-usd-uk-gdp-numbers\\\/\",\"name\":\"GBP\\\/USD: Will UK GDP Estimate Help The Pound Continue Its May Inspired - 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