industry

Pound US dollar exchange rate: GBP steady despite plummeting car sales


The annual stats have shown a slump of -20.5 per cent during September 2018, down from 23.1 per cent growth in September 2017.

Mike Hawes of the Society of Motor Manufacturers and Traders (SMMT) had a mixed take on the data.

He said: “With the industry given barely a year to reapprove the entire European model line-up, it’s no surprise that we’ve seen bottlenecks and a squeeze on supply.

“These are exceptional circumstances.

“The good news is that as backlogs ease, consumers and businesses can look forward to a raft of exciting high-tech cars and a market keen to recover lost momentum.”

While car sales are only one small part of the UK’s economic activity, the sharp slowdown has still rattled GBP traders due to its negative implications.

More widely, the pound US dollar exchange rate remains positive because of lingering optimism from Prime Minister Theresa May’s comments at the Conservative Party Conference yesterday.

The PM indicated a desire to continue engaging with the EU in Brexit negotiations, in addition to suggesting that austerity measures could finally be coming to an end.

Over in the US, a speech from Federal Reserve Chair Jerome Powell has failed to boost the US dollar.

Mr Powell gave a largely ‘business as usual’ forecast, stating that gradual interest rate hikes were likely to continue, although he did also concede that the Fed was prepared for a potential financial crisis.

US dollar traders are looking for hints about future interest rate hikes; current expectations are for one more in 2018 and potentially three in 2019.

US economic data will remain in the spotlight this week, with a Fed speech and factory orders stats coming out this afternoon.

Federal Reserve policymaker Randal Quarles could boost the US dollar pound exchange rate if he backs continued future interest rate hikes when he speaks later.

The factory orders stats could provide further support if they show a forecast-matching jump from -0.8 per cent to 2.1 per cent in August.

Rounding off weekly news, Friday’s US non-farm payrolls and unemployment rate data promises to cause late-week US dollar volatility.

The payrolls reading, which covers jobs added outside of the agricultural sector, is expected to show 185k more people in employment.

The US dollar could well rise on such news, as the unemployment rate in September is also expected to drop from 3.9 per cent to 3.8 per cent.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.