Pound v US dollar: GBP exchange rate surges as US bond yields slide


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The thump is currently at around $1.345 against the US dollar

The pound is currently at round $1.345 against the US dollar, up 0.4 per cent from this morning’s starting demolishes of around $1.339.

The US dollar was driven lower in overnight trade on Wednesday trail a drop in US ten-year bond yields in response to a fall in US consumer self-reliance in December.

US consumer optimism stumbled this month, with the latest US assurance index sliding from 128.6 to 122.1, falling well less a more modest decline to 128 which had been forecast by economists.

The run out of gas was largely attributed to a more pessimistic outlook for both business and job promises over the next couple of months.

The miscarry in bond-yields further dragged on the dollar index – a measurement of the US dollar against a basket of other currencies – which has depreciation roughly -9 per cent in 2017, with the currency currently on track for it largest annual toboggan since 2003.

This is a major reversal from 2016, where the US dollar purposeless the year on a high on optimism over Donald Trump’s first title as President.

Meanwhile the pound was forced to relinquish some of its gains this morning as the British Bankers’ Bond (BBA) published its latest mortgage figures.

According to the data compiled by the BBA, mortgage recommend sanctions slumped to 39,507 in November, while October’s approval numbers were overhauled down from 40,488 to 40,417.

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The pound US dollar exchange percentage has climbed to a new two-week high

Today’s data reflects a continuing drift that we have seen throughout 2017

Eric Leenders, Managing Commandant of Commercial and Personal Finance

However, despite the dip analysts remained to some degree upbeat as it suggests that more flexible credit options escaped to increase mortgage activity in 2017.

Eric Leenders, Managing Director of Commercial and Disparaging Finance said: “Today’s data reflects a continuing trend that we bring into the world seen throughout 2017: ongoing activity in the mortgage market and a sell towards more flexible and affordable personal credit options.”

Looking at the the GBP/USD exchange rate may retreat later this afternoon with the publish of the latest US goods trade balance, with economists forecasting that the gears deficit will have fallen from -$68.3bn to -$67.7bn in November.

At the same time the work over is likely to struggle over the next couple of days as a lull in household data and thin trading volumes over the holiday period lose Sterling a little directionless.

However, looking to next week the strike may be lifted should the UK’s latest PMI figures impress as some analysts augur.

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