Flash: British Pound Sterling in 0.7 pct losses versus US Dollar - ADP and GDP numbers send USD shooting higher
The US dollar (Currency:USD) is executing a powerful comeback against a host of currencies following what has proven to be a poor July for the US unit:
- The British pound sterling (Currency:GBP) has lost 0.7 pct versus the US dollar over the past 24 hours; GBP/USD is now trading at 1.5134.
- The Euro Dollar exchange rate has slumped to record losses of 0.3 pct to reach 1.3225.
- The US dollar / Canadian dollar exchange rate has risen 0.15 pct to reach 1.0322.
NB: The above are spot market quotes, your bank will charge their own discretionary spread when passing on their retail rate. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you more currency. Please learn more here.
US economic data precipitates USD rally - the details
ADP and GBP data releases are behind the gains for USD. As we warned earlier the likelihood of these moves was indeed possible.
US Q2 annualised GDP is much stronger at 1.7% vs 1% expected.
US economy grew 2.8% in 2012, revised up from 2.2%
US ADP non-farm payrolls rise 200,000 in July - a reading that we warned would trigger USD gains.
Deutsche Bank bullish on USD vs GBP in the second half 2013
A timely note from Deutsche Bank analyst George Saravelos who says we are nearing the time to rebuild US dollar longs:
"Ultimately, and given Fed re-pricing so far, our positive USD outlook into H2 rests on improving US growth while other central banks stay very dovish. On that front, we think the BoE could deliver on guidance in next week’s inflation report, which keeps us comfortably bearish GBP.
"Despite the summer pause, we still like owning dollars with a mix of G10 (JPY, GBP, AUD) and EM (TRY, MYR, BRL) shorts being our favorites. Growth surprises, rather than taper timing is the dominant variable, and as such we see Friday’s payrolls, rather than tonight’s FOMC as a bigger market event. With seasonality turning particularly positive in coming weeks, investors should think hard before leaving for the summer holidays with flat dollar risk."