GBP at 1.25 After Trump Comments on US Tax Policies Boost USD

Sterling held strong near its highest in a week on Thursday, some more upbeat British housing data helping soothe nerves over domestic economic growth as comments by U.S. President Donald Trump on taxation sent the dollar broadly higher.

The pound has been rocked by weaker signals on the economy over the past week, suggesting British consumers are finally beginning to feel the pain generated by an almost 20 percent fall in the currency that should push domestic prices higher.

Data earlier this week also showed the first falls in house prices since August, but Thursday’s Royal Institution of Chartered Surveyors (RICS) price index bucked expectations for a further modest loss of pace.

That sent the pound as high as $1.2582 in morning trade in Europe before Trump’s promise of a “phenomenal” announcement on tax to support U.S. growth and investment.

“The move right now has been on the Trump comments, which caused a sell-off in rates and that gave a bit of strength to the dollar,” said Richard Cochinos, European head of G10 currency strategy at Citi.


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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza