The Pound went from hero to zero Friday when profit-taking saw it hit the bottom of the major currency barrel ahead of the weekend and the outlook for the British currency is as uncertain as ever, with analysts and economists divided on the question of whether to expect further gains ahead or a return to earlier lows.
The Dollar steadied Friday as a retreat by the Yen and pause for reflection in other currencies enabled the greenback to find support amid speculation that a 'phase one deal' with China could be signed ahead of the weekend, although the outlook for the U.S. unit is uncertain.
The Pound-Dollar rate capitulated at its highest level since March during the morning session Thursday and was beating a swift retreat from a recovering Dollar as noon approached and the 2019 general election endgame loomed over markets
The Dollar came limping into the morning session Thursday after being wounded by the Federal Reserve (Fed) overnight, although some analysts see it finding support ahead as British voters head to the polls and markets wait to hear if fresh tariffs will land on China’s exports this weekend.
The Dollar pared gains over many rivals in the noon session after official data revealed a surprisingly strong increase in inflation last month although its the looming Federal Reserve (Fed) interest rate decision and guidance that matters most on Wednesday to the outlook for weeks ahead.
The Dollar advanced on some low-yielding rivals Wednesday, tipping the Dollar Index higher even as other riskier rivals got the better of the U.S. currency ahead of the final Federal Reserve (Fed) interest rate decision of 2019, which could provide the greenback a further tailwind of support in the days ahead.
The Pound-Dollar rate stabilised Wednesday in the wake of overnight losses but could suffer from further profit-taking over the coming days because charts show the uptrend in the British currency is failing while some analysts are also suggesting all of the available 'good news' is already in the price of Sterling.
The Dollar softened on Tuesday after being undermined by strength in Pound Sterling and the Euro but the greenback could draw support on Wednesday from the looming Federal Reserve (Fed) interest rate decision and lingering uncertainty over the trajectory of relations with China.