{"id":4665,"date":"2018-06-22T00:00:00","date_gmt":"2018-06-22T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100528-gbp-usd-trade-war-concerns\/"},"modified":"2018-06-22T00:00:00","modified_gmt":"2018-06-22T04:00:00","slug":"100528-gbp-usd-trade-war-concerns","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100528-gbp-usd-trade-war-concerns\/","title":{"rendered":"GBP\/USD: BoE Lifts Pound vs Dollar As Trade War Remains"},"content":{"rendered":"<p>A more hawkish Bank of England (BoE) sent the pound surging versus the US dollar on Thursday. The pound US dollar exchange rate charged through US$1.32 to a high of US$1.3270. This is the highest that the rate has traded in very long.<\/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>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. For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <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> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <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> <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>As analysts expected, the Bank of England voted to keep interest rates on hold at 0.5%. However, a slight shift in the vote split lifted the pound. In May the vote split had been 7-2, whereby 7 policy makers voted to keep rates on hold and 2 voted to hike. At the June meeting that split had changed to 6 voting to keep rates on hold and unexpectedly 3 policy makers voting to raise. In addition to the usual hawks Michael Saunders and Ian McCafferty, Chief Economist at the BoE Andy Haldane also voted to increase rates to 0.75%.<\/p>\n<p>In addition to the encouraging shift in the vote split, the meeting minutes were also more supportive of a rate hike. The central bank indicated that they were ready to raise interest rates if the data allowed. Furthermore, the BoE added that they may look to start selling its government bonds sooner than it initially anticipated, in yet another positive move. Market participants read the overall tone of the meeting as a move closer towards an August rate hike, which boosted the pound.<\/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>After a busy week for the pound between Brexit and the BoE, today will be a noticeably quieter day, with no releases on the economic calendar.<\/p>\n<h2><a href=\"#pmi-s-in-focus-as-trade-war-fears-linger\" name=\"pmi-s-in-focus-as-trade-war-fears-linger\"><\/a>PMI\u2019s In Focus As Trade War Fears Linger<\/h2>\n<p>The dollar was under pressure on Thursday as trade war fears continued to bite. Up until now escalating trade war fears had pushed the dollar higher, as investors looked towards the dollar for its safe haven status. However, on Thursday market participants were reminded that trade tensions are not just between the US and China, but in fact the US and many other countries. These countries and regions are starting to implement retaliation tariffs which could start to quickly hurt US companies and world trade I general.<\/p>\n<p>Today US PMI data could help peel investor attention away from trade wars. PMI\u2019s in the US have been on a recent upswing and this is expected to continue, potentially boosting the dollar.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does strong economic data boost a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Solid economic indicators point to a strong economy. Strong economies have strong currencies because institutions look to invest in countries where growth prospects are high. These institutions require local currency to invest in the country, thus increasing demand and pushing up the money\u2019s worth. So, when a country or region has good economic news, the value of the currency tends to rise. <\/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>A more hawkish Bank of England (BoE) sent the pound surging versus the US dollar on Thursday. The pound US dollar exchange rate charged through US$1.32 to a high of US$1.3270. This is the highest that the rate has traded in very long. What do these figures mean? When measuring the value of a pair [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4666,"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-4665","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: BoE Lifts Pound vs Dollar As Trade War Remains - 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\/100528-gbp-usd-trade-war-concerns\/\" \/>\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\\\/100528-gbp-usd-trade-war-concerns\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100528-gbp-usd-trade-war-concerns\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: BoE Lifts Pound vs Dollar As Trade War Remains\",\"datePublished\":\"2018-06-22T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100528-gbp-usd-trade-war-concerns\\\/\"},\"wordCount\":830,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100528-gbp-usd-trade-war-concerns\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100528-gbp-usd-trade-war-concerns.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\\\/100528-gbp-usd-trade-war-concerns\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100528-gbp-usd-trade-war-concerns\\\/\",\"name\":\"GBP\\\/USD: BoE Lifts Pound vs Dollar As Trade War Remains - 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