The dollar showed some slowdown towards the weekend but has enjoyed some gains over the last few weeks. The Dollar Index has reached a two-month high, which shone a light on the lows of both GBP and EUR.
However, it hasn’t been all doom and gloom in relation to GBP. Despite Data from the Confederation of British Industry lessened the demand for GBP as it showed that factory orders had dropped dramatically, which can be attributed to the uncertainty surrounding Brexit.
Until a final decision is made it is likely that manufacturers will be taking less risk. This has been seen in the scaling back on investments, which are expected to grind to a halt over the next few months.
However, reports that the European Union will offer the Prime Minister a UK wide customs union that acts as a solution to the current issues surrounding the Irish backstop.
The slowdown in the dollar has been connected to the current geopolitical concerns, which us odd for USD. During these times, investors will often choose USD as their safety net.
The concerns include the isolation of Saudi Arabia following the passing of Jamal Khashoggi, and the pressures in Italy due to its conflict with the European Central Bank.
GBP-USD 1.2800 Ahead of Budget Speech
As well as the woes surrounding Brexit and the upcoming Exchequers speech, US data has also created fear that a steepening global slowdown.
Early trading shows GBP-USD at 1.2830.
EUR-USD Falls but Recovers Swiftly
The EUR-USD hit fresh lows on Friday, but the currency quickly rebounded by the close. There was a resistance level of 1.1392, and a much higher level is needed for the pairing to gain any more momentum.
Despite the positivity, there has been more of a decline shown in trends, which has the potential to push the pairing lower.
Although there have been gains seen with EUR, USD and GBP, it’s plain to see the uncertainty surrounding each currency means that gains will be made and lost.
The EUR seems to be doing well in the advent of such occurrences, but USD and GBP continue to fluctuate as there seems to be new directions and statements made on a regular basis.
For example, the recent attack on the Fed by Donald Trump had the potential to damage the dollar, just as the uncertainty surrounding Brexit means that pound sterling continues to fluctuate.
Just as reports have seen a decrease in value for the currency, there have also been surprising findings in the past that manage to lead into the safe zone.
Needless to say, the upcoming weeks will be a challenger for both currencies, but both have put up a good fight in the past.