Pound US dollar exchange rate: GBP steady in wake of EU-US trade talks (2024)

The pound US dollar exchange rate is currently at around $1.317 (Image: GETTY)

It is largely unmoved from this morning’s opening levels, holding close to the one-week high struck overnight in the wake of EU-US trade talks.

The pound is trading narrowly against the US dollar this morning after the pairing climbed around half a cent overnight following some positive trade discussions between the EU and US.

US President Donald Trump and EC President Jean-Claude Juncker met in Washington yesterday amid heightened fears that the EU and US could be hurtling towards a trade war.

However markets were pleasantly surprised as the meeting resulted in the two announcing they would work towards reducing trade barriers and reforming the WTO.

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While details are a little thin on the ground, markets took this as a sign that a trade war may be averted.

A significant portion of the US dollar’s recent strength has been derived from the deterioration of global trade ties, so the easing of tensions prompted some selling of US dollar.

However with President Trump not “exactly known for his consistency” we are unlikely to see a full unwinding of the US dollar just yet.

At the same time the pound is holding steady this morning as markets begin to brace for the Bank of England’s August policy meeting.

Despite some lacklustre data releases from the UK last week, markets now appear confident that the BoE will vote to raise interest rates when it meets next week.

The question for pound investors will now be whether the hike will be a one-off or whether the bank will be confident enough to follow the Federal Reserve in normalising monetary policy.

Looking ahead, the pound US dollar exchange rate looks poised to slide this afternoon, following the publication of the latest US durable goods orders data.

Economists are forecasting the data will reveal order growth surged from -0.6 per cent to 3 per cent in June, with the strong rebound in orders likely to propel the US dollar higher.

Meanwhile Nationwide will release its latest UK house price index on Friday, potentially weakening the pound if house price growth slows as expected.

However any downturn in Sterling may prove limited, with the currency likely to remain resilient thanks to expectations of a rate hike from the Bank of England next month.

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