The British pound has recovered from its lowest price level since 2017 and the U.S. dollar is nursing losses thanks to lower Treasury yields. The British pound has now moved off a 27 month low price point set earlier in the week.
The dollar index, which tracks the greenback’s strength in a basket against six other currencies, was trading flat during the Asian trade session at 97.20. Overnight, the dollar index lost 0.2 percent during the North American trade session.
The dollar had hit a one week high, earlier in the week, at 97.444 thanks to solid retail sales data and a weakness in the British pound and euro. The dollar then lost ground as Treasury rates retreated thanks to weaker than expected U.S. housing market data and renewed concerns surrounding the trade conflict between the United States and China.
The GBP/USD exchange rate was flat at $1.2434. The sterling fell to a 27 month low at $1.2382 on Wednesday thanks to concerns that the United Kingdom was ready to exit the European Union with or without a deal on October 31.
The EUR/USD exchange rate was unchanged at 1.1228 after gaining 0.1 percent yesterday. The gains for the euro are modest thanks to the European Central Bank considering more monetary easing as early as next week at their policy decision.
Traders Watch Economic Data Weakening the Dollar and the Support the British Pound
There has been some mixed data coming out of the United States that as muddied the waters with the economy. However, the dollar is already facing pressure as the FOMC is set to cut its Fed Funds rate on July 31 at their monetary policy decision.
The dollar is also under pressure thanks to the International Monetary Fund (IMF). Yesterday the IMF said that the greenback is overvalued by at least six to 12 percent based on current fundamental conditions.