After weaker than forecast UK manufacturing and construction figures dented Sterling's recent recovery, GBP/USD exchange rates were able to bounce back today after the latest U.S. trade balance figures impacted the value of the dollar.
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What a difference a week makes.
Last week saw the GBP/USD cross sitting just shy of $1.55 but after a run of poor economic data releases from the UK the pound tumbled across the board.
This morning saw GBP/USD exchange rates back down at $1.5093 but after the U.S. trade balance figures showed the trade deficit had risen by 43.1% to $51.4 billion (its highest level since October 2008) the dollar weakened and pushed GBP/USD back towards $1.52.
It seems as though the strong dollar has started to weigh heavily on the U.S. economy and will once again raise questions as to when the Federal Reserve will raise interest rates. With expectations of a rate hike pushed back to September, the next few months will be closely monitored and if the U.S. economy continues to suffer then there is every chance a rate rise will be pushed back even further.
Rocky road ahead for the pound.
With the UK election only days away and no clear winner in sight we could see the pound come under some extra pressure this week. If we are left with a hung parliament, the uncertainty surrounding a potential coalition could see the pounds value severely affected.
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