GBP/USD hovers around 1.3150 as US shutdown dampens households’ sentiment
GBP/USD clings to minimal gains on Friday amid the lack of economic data releases in the UK, as markets digest scarce economic data amid the ongoing US government shutdown. The pair trades at 1.3148, up 0.10% after hitting a daily low of 1.3095.
Sterling edges higher as Dollar steadies; weak US sentiment data and Fed comments cap market optimism
The Greenback has recovered some ground during the week, yet it remains poised to end with losses of 0.27%, according to the US Dollar Index (DXY), which measures the buck’s value against a basket of six currencies. The DXY is at 99.45 after hitting a six-month high at 100.36.
Federal Reserve (Fed) officials crossed the wires on Friday. The Vice Chair Philip Jeffferson said that “The Fed should proceed slowly with further rate cuts as policy approaches the neutral rate.” He commented that his approach would be meeting by meeting and cited “a potential lack of government data due to the shutdown.”
On Friday, the University of Michigan revealed that Consumer Sentiment in November plunged to 50.3 from 53.6 in October. The survey noted that “With the federal government shutdown dragging on for over a month, consumers are now expressing worries about potential negative consequences for the economy.“
Inflation expectations for a one-year period rose to 4.7% from 4.6% and for a five-year period dipped from 3.9% to 3.6%.
The White House Economic Adviser Kevin Hassett told CNN that the shutdown is hurting the economy more than they expected, anticipating a reduction of 1 to 1.5% in GDP growth this quarter.
Source: Fxstreet
