{"id":4368,"date":"2018-02-28T00:00:00","date_gmt":"2018-02-28T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100372-gbp-usd-us-fed-optimism\/"},"modified":"2018-02-28T00:00:00","modified_gmt":"2018-02-28T05:00:00","slug":"100372-gbp-usd-us-fed-optimism","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100372-gbp-usd-us-fed-optimism\/","title":{"rendered":"GBP\/USD: Dollar Rises vs. Pound After Optimistic Comments Fed"},"content":{"rendered":"<p>Brexit headlines and a more hawkish sounding Federal Reserve Chair, meant that the pound fell versus the dollar across Tuesday. After starting the previous session at US$1.3962, the exchange rate sunk to a low of aUS$1.3858, before climbing slightly into the close.<\/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>In the absence of high impacting economic data, market participants focused solely on Brexit headlines, which dragged the pound lower. EU Chief Negotiator Michel Barnier once again cast a shadow over a post Brexit transition period, saying that there were still vast differences between the positions of the UK and the EU and that time was running out to strike a deal. Barnier here, was referring to the October target by which time a Brexit treaty needs to be agreed, including transition period, in order for it to be ratified by March 2019. Barniers comments unnerved pound traders as no transition deal, will most likely mean a hard Brexit. This is the worst-case scenario for the pound.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>A soft Brexit implies anything less than UK\u2019s complete withdrawal from the EU. For example, it could mean the UK retains some form of membership to the European Union single market in exchange for some free movement of people, i.e. immigration. This is considered more positive than a \u201chard\u201d Brexit, which is a full severance from the EU. The reason \u201csoft\u201d is considered more pound-friendly is because the economic impact would be lower. If there is less negative impact on the economy, foreign investors will continue to invest in the UK. As investment requires local currency, this increased demand for the pound then boosts its value. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Today, in addition to keeping an ear out for Brexit headlines, market participants will also look towards consumer confidence data. Analysis are forecasting that consumer confidence will tick down in February to -10, down from -9 in the previous month, as Brexit uncertainties weigh on sentiment. Falling consumer confidence is bad news for the economy, because it means the consumer spends less. Should the consumer confidence data disappoint today, the pound could fall.<\/p>\n<h2><a href=\"#us-gdp-inflation-data-in-focus\" name=\"us-gdp-inflation-data-in-focus\"><\/a>US GDP &amp; Inflation Data In Focus<\/h2>\n<p>New Federal Reserve Chair, Jerome Powell, made his first appearance before the House in a congressional testimony. Powell was very optimistic in his assessment of the US economy, which triggered speculation in the markers that he could look to raise interest rates faster than the three rate rises this year that had been laid out by his predecessor Janet Yellen. As a result of increased odds for an interest rate the dollar rallied.<\/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<p>The dollar could experience another volatile session today as investors look towards high impacting releases. These include fourth quarter GDP and inflation numbers which will be closely watched. Strong readings for economic growth and inflation could boost the dollar dramatically higher.<\/p>\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>Brexit headlines and a more hawkish sounding Federal Reserve Chair, meant that the pound fell versus the dollar across Tuesday. After starting the previous session at US$1.3962, the exchange rate sunk to a low of aUS$1.3858, before climbing slightly into the close. What do these figures mean? When measuring the value of a pair of [&hellip;]<\/p>\n","protected":false},"author":163946601,"featured_media":4369,"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-4368","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: Dollar Rises vs. Pound After Optimistic Comments Fed - 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\/100372-gbp-usd-us-fed-optimism\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tarun Gidwani\" \/>\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\\\/100372-gbp-usd-us-fed-optimism\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100372-gbp-usd-us-fed-optimism\\\/\"},\"author\":{\"name\":\"Tarun Gidwani\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/cb9d08b81054b1281b909957fd8222cb\"},\"headline\":\"GBP\\\/USD: Dollar Rises vs. Pound After Optimistic Comments Fed\",\"datePublished\":\"2018-02-28T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100372-gbp-usd-us-fed-optimism\\\/\"},\"wordCount\":853,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100372-gbp-usd-us-fed-optimism\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100372-gbp-usd-us-fed-optimism.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2018\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100372-gbp-usd-us-fed-optimism\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100372-gbp-usd-us-fed-optimism\\\/\",\"name\":\"GBP\\\/USD: Dollar Rises vs. Pound After Optimistic Comments Fed - 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