{"id":4492,"date":"2018-04-16T00:00:00","date_gmt":"2018-04-16T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100434-gbp-usd-us-russia-tension\/"},"modified":"2018-04-16T00:00:00","modified_gmt":"2018-04-16T04:00:00","slug":"100434-gbp-usd-us-russia-tension","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100434-gbp-usd-us-russia-tension\/","title":{"rendered":"GBP\/USD: Will Growing US-Russia Tensions Hit Pound vs US Dollar?"},"content":{"rendered":"<p>The pound soared to just shy of $1.43 against the US dollar on Friday, before pulling back below $1.4250 into the close. The pound traded higher against the US dollar for five straight sessions last week, pushing it towards one of the highest levels of this year.<\/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>The pound appreciated 15 versus the dollar over the last week as hopes for an EU trade deal increased. U.K. Brexit Secretary David Davis said that he believed the probability of no deal being achieved was very small. This boosted the pound as market participants consider a hard Brexit is less likely.<\/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>The pound was also supported by increased hopes of an interest rate rise in May. Investor optimism grew over a rate hike after Bank of England policy maker Ian McCafferty said that the central bank shouldn\u2019t delay raising rates.<\/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>This week investor attention will shift back to the U.K. economic calendar. Analysts are expecting Inflation data on Tuesday and wages data on Wednesday to be highlights this week. February\u2019s inflation level finally showed showed signs of easing lower after five months of being over 3%. Wages are also climbing higher, reducing the squeeze on the consumer. Market participants will be keen to see these patterns continue. The UK economy is very dependant on the consumer spending, so any relief in pressure on the consumer could help boost the service sector and therefore the economy.<\/p>\n<h2><a href=\"#geopolitics-data-to-drive-the-dollar\" name=\"geopolitics-data-to-drive-the-dollar\"><\/a>Geopolitics &amp; Data To Drive The Dollar<\/h2>\n<p>The dollar finished the previous week on the back foot. Despite trade war fears with China dying down, increasing political tension with Russia over Syria, weighed on sentiment for the dollar. Analysts are expecting the dollar to be under the spotlight as market opens following Western air strikes against targets in Syria over the weekend. Given the US involvement in the air strikes the dollar could be less attractive than other safe haven currencies.<\/p>\n<p>US Retail Sales could provide a welcomed distraction for dollar traders and could potential offer a rallying point for the dollar, given that forecast point to a solid increase on the month. A strong reading would provide reassurance to investor; however, a soft number could hit confidence even if it is unlikely to change the Fed\u2019s outlook.<\/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>The pound soared to just shy of $1.43 against the US dollar on Friday, before pulling back below $1.4250 into the close. The pound traded higher against the US dollar for five straight sessions last week, pushing it towards one of the highest levels of this year. What do these figures mean? When measuring the [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4493,"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-4492","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: Will Growing US-Russia Tensions Hit Pound vs US 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\/100434-gbp-usd-us-russia-tension\/\" \/>\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\\\/100434-gbp-usd-us-russia-tension\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100434-gbp-usd-us-russia-tension\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Will Growing US-Russia Tensions Hit Pound vs US Dollar?\",\"datePublished\":\"2018-04-16T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100434-gbp-usd-us-russia-tension\\\/\"},\"wordCount\":874,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100434-gbp-usd-us-russia-tension\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100434-gbp-usd-us-russia-tension.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\\\/100434-gbp-usd-us-russia-tension\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100434-gbp-usd-us-russia-tension\\\/\",\"name\":\"GBP\\\/USD: Will Growing US-Russia Tensions Hit Pound vs US Dollar? 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