The U.S. Dollar is likely to continue rising, despite the recent slow-down in some areas of the U.S. economy says John Hardy, head of FX strategy at Saxobank, largely thanks to a U.S. Federal Reserve that will retain the title of the “tightest central bank in the world.”
The Dollar was boosted Monday after The Wall Street Journal reported that negotiators are close to finalising a trade deal that could see White House tariffs removed from Chinese goods exported to the U.S., which suported the greenback and prompted a fresh bid for so-called risk assets.
The Technical outlook for GBP/USD is constructive and we would expect Sterling to maintain its 2019 bias for strengthening. But, we are wary of a surprise vote on Brexit, while a broadly stronger U.S. Dollar could provide headwinds.
The Pound-to-Dollar rate pulled back from recent highs Friday but analysts are still bullish in their forecasts for the pair, and some say current levels provide an attractive opportunity for speculators to buy into Sterling's recovery while it's still at a reasonable price.
The Pound-to-Dollar rate retreated further from recent highs Thursday after official data showed the U.S. GDP growing faster than was expected during the final-quarter of 2018, potentially tempering fears of an imminent slowdown in the world's largest economy.