Pound US dollar exchange rate: GBP flat ahead of US-China trade talks

THE pound remains rangebound against the US dollar, with the pairing currently trading at around $1.299.

Pound US dollar exchange rate


China’s Commerce Ministry has confirmed that Vice-Premier Liu He was on his way to Washington with a delegation of officials for another round of face-to-face trade talks. However, on Wednesday, US President Donald Trump said China “broke the deal”, heightening tensions between the two sides. This comes ahead of further trade negotiations scheduled for later on today. At a campaign rally in Florida, Mr Trump stated: “They broke the deal […] They can’t do that. So they’ll be paying.”

The US President also stated that if his country and China were unable to reach a deal, there would be “nothing wrong with taking in more than $100bn a year.”

However, Mr Trump confirmed that China has been making attempts to renegotiate the deal. 

China had undermined core US demands, reversing commitments on key issues including currency manipulation and the theft of US intellectual property. 

Meanwhile, Beijing have said it will take “necessary countermeasures” if the US decide to raise tariffs on Friday.

In a statement the Chinese Commerce Ministry said: “The escalation of trade friction is not in the interests of the people of the two countries and the people of the world."

The tensions have benefitted the safe-haven US dollar as risk sentiment remains fragile. 

Meanwhile, on Wednesday Prime Minister Theresa May rejected calls to resign over her handling of Brexit.

Replying to Tory Brexiteer Andrea Jenkyns, who accused Mrs May of failing to “deliver on her promises” and loosing public trust, the Prime Minister simply stated: “Not an issue about me.”

Looking ahead to later in the session, Chinese Vice-Premier Liu He is expected to arrive in Washington to continue trade talks.

If there are reports that discussions are progressing successfully, it is likely the US dollar will slip against the pound as risk appetite increases. 

Meanwhile, the pound could come under pressure against the US dollar tomorrow morning following the release of the UK’s GDP for the first quarter.

If the preliminary gross domestic product (GDP) figure reveals that the UK economy stagnated or even shrank during Q1, sentiment in Sterling could similarly head south.