Last week saw the pound US dollar exchange rate hit a high of $1.321.
This week opened with the pairing trading at $1.311, so Sterling’s current level represents a rise on the week so far.
As with Monday, the pound’s movement today has mainly been dictated by pound trader uncertainty about Thursday’s Bank of England (BoE) interest rate decision.
The latest UK economic news has been unsupportive, taking the form of a GfK consumer confidence reading for July.
The figure declined from -9 points in June to -10 points, indicating a greater proportion of pessimistic respondents.
Reinforcing this gloomy outlook, GfK Client Strategy Director Joe Staton said: “The overall index score has now registered at zero or negative since February 2016.
“Concerns about our personal financial situation, and especially the general economic outlook, have contributed to this long slump.
“In the medium term, and during the uncertainty in the run-up to the UK leaving the European Union in eight months, it is hard to forecast what kind of good news will change the numbers from negative to positive.”
The news would have been negative in any event, but as the reading fell from -9 points to -10 instead of remaining unchanged as forecast this has been especially worrying.
On the other side of the pairing, the US dollar has also been in low demand because on concerns about the future state of the housing market.
Last Friday’s US GDP report showed a phenomenal 4.1 per cent growth, but a closer look at the figures showed that residential investment shrank during Q2 2018.
Combined with the least affordable housing in almost a decade, this could mean that a slowdown in the US housing market is on the way.
While experts don’t believe that a housing market crash is on the horizon, it could mean that an economically restricting slowdown may be unavoidable.
The US dollar will be in the spotlight this afternoon, when high-impact personal income and spending data comes out.
Covering June, these readings are expected to show a reprint of 0.4 per cent income growth and an increase in personal spending with a shift from 0.2 per cent to 0.4 per cent.
Any pound US dollar exchange rate losses triggered by this news could extend to Wednesday morning if July’s UK manufacturing PMI shows a forecast-matching slowdown.