Data released overnight revealed that Chinese imports from the US slumped by a stunning 28 per cent in Q1 2019. Alongside this figure it was shown that US exports to China fell 21 per cent in March, while Chinese exports to the US rose by 10.6 per cent. Commenting on the data, Senior China Economist Julian Evans-Prichard said: “While a US-China trade deal looks increasingly within reach, the reversal of US tariffs would only provide a small boost to exports of around one to two per cent.
“With global growth set to remain weak in the coming quarters a strong rebound in exports therefore looks unlikely.”
Nevertheless, the safe-haven US dollar remained muted against the pound.
On Thursday the US Producer Price Index (PPI) posted the largest rise in five months, increasing by 2.2 percent in the 12 months leading to March.
PPI rose by a higher-than-forecast 0.6 per cent in March, lifted by an increase to the cost of gasoline making this the largest increase since October 2018.
However, underlying wholesale inflation was tame with core PPI increasing by 2.4 percent in the 12 months leading to March.
This was the smallest annual increase since August 2017.
Meanwhile, during a speech on Thursday, the Federal Reserve’s Vice Chairman Richard Clarida emphasised the “patient” approach of the central bank.
He said: “The current economic expansion almost certainly will become the longest on record.
“That said, the incoming data have revealed signs that US economic growth is slowing somewhat from 2018s robust pace.”
Looking ahead to this afternoon, the dollar could fall against the pound following the release of the Michigan Consumer Sentiment Index.
If consumer sentiment is shown to have slipped this month, as expected, the US dollar could fall against Sterling.
With the Brexit deadline now extended to 31 October 2019, it is likely that any major political developments could cause movement in the pound US dollar exchange rate today.