ExchangeRates.org.uk – The Pound US Dollar () exchange rate traded sideways on Monday as investors braced for the UK autumn budget on Wednesday.Latest — Exchange Rates:
Pound to Dollar (GBP/USD): 1.31067 (+0.08%)
Euro to Dollar (EUR/USD): 1.15223 (+0.13%)
Dollar to Japanese Yen (USD/JPY): 156.8975 (+0.13%)
DAILY RECAP:
The Pound (GBP) traded in a tight band on Monday, with investors showing little appetite for big moves in the absence of new UK data and with attention fixed firmly on this week’s budget.With Chancellor Rachel Reeves set to present the autumn budget on Wednesday, traders were reluctant to adjust their GBP positions without clearer signals on the government’s fiscal plans.
The upcoming announcement is expected to be a key market catalyst, as Reeves aims to juggle economic growth ambitions with fiscal discipline while navigating political pressures from voters and Labour MPs.
Against this backdrop, and with potential volatility looming later in the week, GBP market activity remained muted at the start of the session.
Meanwhile, the US Dollar (USD) was also muted on Monday amid uncertainty over the future of monetary policy from the Federal Reserve.
Last week, USD experienced notable demand amid bets that the US central bank would take a more hawkish position in future policy decisions.
However, some dovish comments from Fed official John Williams saw the currency retrace its steps at the end of the week.
On Monday, this meant the ‘Greenback’ had stabilised somewhat, with USD investors preferring to wait for fresh signals before adjusting their positions.
Near-Term GBP/USD Forecast: US Jobs Data to Dent the Dollar?
Looking forward, the Confederation of British Industry’s (CBI) distributive trades survey is the only UK data release due on Tuesday.
With sales volumes expected to have declined from -27 to -30 in November, Sterling could face modest pressure.
Across the Atlantic, the latest weekly ADP employment change figure is the first key release.
After two consecutive months of declining employment, another weak reading could reinforce the idea that the US labour market is slowing and therefore fuel Federal Reserve interest rate cut bets.
However, any losses could be contained by new data for September.
US producer prices are expected to have increased, while retail sales growth is set to remain positive.
Meanwhile, market risk appetite may influence the pairing.
If the mood improves, the increasingly risk-sensitive Pound could rise against the safe-haven US Dollar.
Conversely, if sentiment deteriorates then the safer ‘Greenback’ may strengthen.
This content was originally published on ExchangeRates.org.uk
