ExchangeRates.org.uk - Down roughly 0.2% from Thursday’s opening levels.
The US Dollar (USD) firmed on Thursday as investors favoured the safe-haven currency amid a broadly risk-averse market mood.
Markets remain jittery in regard to President-elect Donald Trump’s proposed trade policy, with economists warning his plans for sweeping tariffs will severely impact global growth.
Trump triggered some notable volatility earlier this week after he announced plans to impose tariffs on goods entering the US from China, Mexico and Canada on his first day in office.
A trimming of Federal Reserve interest rate cut expectations in the new year also helped to bolster USD sentiment.
However, the upside in the US dollar remained limited on Thursday as the closure of US markets for Thanksgiving resulted in thin trading conditions in the currency.
The Pound (GBP) struggled to attract support on Thursday amid a lull in UK economic data.
This left Sterling sentiment vulnerable to ongoing concerns over the UK’s economic trajectory.
Recent UK data releases have pointed to a sharp slowdown in UK economic activity through the second half of 2024.
The UK’s latest PMIs were particularly worrying as they reported UK private sector growth contracted this month for the first time in a year.
GBP/USD Exchange Rate Forecast: Risk-off Flows to Sustain US Dollar Demand?
Looking ahead to the end of the week, in the absence of any notable US economic data, movement in the Pound to US Dollar exchange rate is likely to be primarily tied to market risk dynamics.
If investors continue to err on the side of caution this could underpin demand for the safe-haven ‘greenback’ and help it claw back some of the losses it suffered in mid-week trade
Meanwhile the Bank of England will publish its latest Financial Stability Report on Friday, which may influence Sterling sentiment.
This content was originally published on ExchangeRates.org.uk