Pound US Dollar (GBP/USD) Exchange Rate Slides on Surprise Increase in US Inflation

Pound US Dollar (GBP/USD) Exchange Rate Slides on Surprise Increase in US Inflation

12 Sep 2019 03:05 PM
 

The Pound Sterling US Dollar (GBP/USD) exchange rate slumped and the pairing is currently trading at around $1.2331. August’s Producer Price Index (PPI) edged up by 0.1% despite forecasts expecting prices to remain unchanged. The US Dollar received an upswing of support this afternoon as data revealed US producer prices rose unexpectedly.Investors saw little reason to move much on the Pound to Euro (GBP/EUR) exchange rate this morning, as markets awaited the European Central Bank’s (ECB) September policy decision due this afternoon. Since opening this week at mixed levels, GBP/EUR has sustained solid gains of over a cent thanks to UK growth data and Brexit hopes. Overnight, GBP/EUR touched on a two month high of 1.1223 before slipping and trending closer to the key level of 1.1200 at the time of writing on Thursday. The ECB is expected to cut Eurozone rates during today’s decision, but market focus is on the tone the bank will take in regards to quantitative easing (QE) and the Eurozone’s economic outlook. A 'no-deal' Brexit could snarl cross-Channel trade routes, disrupting supplies of medicines and fresh food while protests spread across Britain, according to a worst-case scenario reluctantly released by the government on Wednesday.

The "Operation Yellowhammer" assumptions, prepared six weeks ago just days after Boris Johnson became prime minister, form the basis of government no-deal planning.

They were released at the demand of lawmakers who accuse Johnson's government of concealing the ruinous impact of leaving without a deal, and could add to the political acrimony as Britain lurches toward its Oct. 31 deadline to exit the EU.

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