{"id":4514,"date":"2018-04-24T00:00:00","date_gmt":"2018-04-24T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100446-gbp-usd-pound-five-month-low\/"},"modified":"2018-04-24T00:00:00","modified_gmt":"2018-04-24T04:00:00","slug":"100446-gbp-usd-pound-five-month-low","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100446-gbp-usd-pound-five-month-low\/","title":{"rendered":"GBP\/USD: Pound Continues To Fall vs. Dollar Hitting 5 Week Low"},"content":{"rendered":"<p>The dollar continued to rise on Monday as investors increased their expectations of a more aggressive Federal Reserve. The stronger dollar pulled the pound US dollar exchange rate to a low of US$1.3927. This is the lowest that the rate has traded at in 5 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>Investors continued to digest the more conservative tone from the Bank of England (BoE) governor Mark Carney last week. This came following a week of high impacting data, which was weaker than analysts had forecast. UK wage growth remained constant rather than ticking higher; inflation eased closer towards the central banks 2% target and retail sales dropped heavily. A hat-trick of disappointment for pound traders and with no other UK economic data released on Monday, market participants continued to dwell on these forecast missing numbers.<\/p>\n<p>Today investors will look towards UK government borrowing figures for further clues as to the health of the UK economy. Analysts are anticipating that net borrowing will show a drop from \u00a30.27 billion surplus to -\u00a31.2 billion decline. Should this be true, then confidence towards the outlook of the UK economy could dampen, potentially dragging the pound even lower versus the US dollar. On the contrary, a stronger figure could help lift the pound.<\/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=\"#dollar-rallies-on-higher-interest-rate-expectations\" name=\"dollar-rallies-on-higher-interest-rate-expectations\"><\/a>Dollar Rallies On Higher Interest Rate Expectations<\/h2>\n<p>The US dollar has been rallying for the previous few sessions in parallel to easing geopolitical fears and increasing interest rate expectations. A rally in commodity prices, which are dollar dominated, has increased market expectations of higher inflation in the US. This, in turn, is boosting expectations of the Federal Reserve having to take a more aggressive path to monetary policy, possibly hiking interest rates more than initially planned. As the interest rate expectation has increased so has 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<p>Today investors will be watch the release of the US consumer confidence index. The index dropped in March to 127.7, from an 18 year high of 130 in February. Analysts are forecasting that confidence will haver dropped again in April in light of trade war fears and geopolitical concerns regarding the US souring relations with Russian. A fall in consumer confidence could weigh on sentiment for the dollar, however the impact may be limited given that confidence is still hovering close to a multi decade high.<\/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 dollar continued to rise on Monday as investors increased their expectations of a more aggressive Federal Reserve. The stronger dollar pulled the pound US dollar exchange rate to a low of US$1.3927. This is the lowest that the rate has traded at in 5 weeks. What do these figures mean? When measuring the value [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4515,"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-4514","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":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GBP\/USD: Pound Continues To Fall vs. Dollar Hitting 5 Week Low - 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\/100446-gbp-usd-pound-five-month-low\/\" \/>\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\\\/100446-gbp-usd-pound-five-month-low\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100446-gbp-usd-pound-five-month-low\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Continues To Fall vs. Dollar Hitting 5 Week Low\",\"datePublished\":\"2018-04-24T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100446-gbp-usd-pound-five-month-low\\\/\"},\"wordCount\":846,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100446-gbp-usd-pound-five-month-low\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100446-gbp-usd-pound-five-month-low.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\\\/100446-gbp-usd-pound-five-month-low\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100446-gbp-usd-pound-five-month-low\\\/\",\"name\":\"GBP\\\/USD: Pound Continues To Fall vs. Dollar Hitting 5 Week Low - 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