US dollar rallied after the Presidential election, as there were hopes for new tax reforms and fiscal spending. However, the currency faces a hard time after Donald Trump took over the White House, due to the political uncertainties. The tax reforms are not introduced yet and the jobless claims data is also not favorable, as per expectations. As a result, US dollar index lost 0.3% to reach 101.01, against a basket of international currencies.
The US Fed members are reluctant to increase interest rates and the currency struggled to gain strength. Pound, which was suffering due to Brexit used the opportunity to gain against the US dollar.
The retail sales of the UK were modest, even though it was less than the speculated growth. The Pound Sterling rose against the US dollar, reaching its two-week high. The GBP/USD pair gained 0.9%.
Pound which took a beating, due to Brexit is finally able to gain, mainly because of the economic instability in the US and Europe. Currency experts suggest that Euro/Sterling pair will be affected as a result of the political situation in Europe, where the French presidential elections are in favor of anti-EU leader. The pound gained 0.5% against Euro, reaching its two-month high against the currency.
Even though the pound moved ahead this week, it is mainly due to the weakening of the dollar. Economists are cautious, as they take the wait and watch approach, to see whether he pound continues to move forward