Pound US dollar exchange rate holds steady as US consumer confidence hits five-month high

One dollar note and ten pound note

US consumer confidence hits five-month high (Image: Getty)

Lynn Franco, the Senior Director of Economic Indicators at The Conference Board, was upbeat about the report, commenting: “Optimism about the labour market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020.”

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Meanwhile, the US dollar continues to benefit from its safe-haven status as China’s coronavirus outbreak has dampened market risk appetite as the Chinese economy, which is the second largest in the world, is being severely compromised.

Jeffrey Chan Lap-tak, an analyst at Oriental Patron Financial Group, explains: “It will affect market sentiment in the near term, as the disease will hit the tourism and retail industries of Hong Kong.”

“These sectors have already been hit hard by the eight-month-long anti-government protests.”

The pound has remained rangebound against many of its peers this week, with markets speculating on whether the Bank of England (BoE) will slash its interest rates on Thursday. 

After last week saw odds of a rate cut rise to 70 percent, which then dropped due to a better-than-expected performance in the UK services sector, pound investors are holding back as a rate cut still remains very much on the table. 

Brexit is also continuing to dominate headlines, with the European Parliament set to approve the terms of the UK’s departure later on today. 

Due to a lack of economic data today, investors remain wary of the pound as fears of a possible no-deal Brexit continue to haunt UK markets. 

Looking ahead to tomorrow, the pound to US dollar exchange rate could sink if the BoE goes ahead and slashes its interest rates from 0.75 percent, as this would dampen confidence in the UK economy as the nation officially leaves the European Union on Friday.