The US dollar has been the world’s reserve currency for decades, and its strength has a direct effect on the value of other currencies. This is especially true for the GBP/USD exchange rate, which has been hovering around 1.2000 for some time now. The reason for this is largely due to data coming out of the United States.
The US economy has been performing well in recent months, with strong job growth, rising wages, and low inflation. This has caused the US dollar to strengthen, which in turn has kept the GBP/USD exchange rate near 1.2000. The US Federal Reserve has also been raising interest rates, which has further supported the US dollar and kept the exchange rate steady.
The US dollar’s strength is also being supported by the fact that it is seen as a safe-haven currency. Investors are looking to the US dollar as a safe place to park their money in times of uncertainty. This has caused the US dollar to appreciate against other currencies, including the British pound.
In addition to economic data from the US, geopolitical events have also had an impact on the GBP/USD exchange rate. For example, the UK’s decision to leave the European Union has caused uncertainty in the markets and weakened the British pound. This has caused the GBP/USD exchange rate to remain near 1.2000.
Overall, the US data and geopolitical events have caused the GBP/USD exchange rate to remain near 1.2000. The US economy is performing well and the US dollar is seen as a safe-haven currency, both of which are supporting its strength. In addition, geopolitical events such as Brexit have weakened the British pound, further keeping the exchange rate steady.
Source: Plato Data Intelligence: PlatoAiStream
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