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Pound US Dollar Exchange Rate Slumps after Fears of ?Hard Brexit? Grow

November 22, 2016 - Written by Toni Johnson

Pound to US Dollar Exchange Rate Slumps as Hard Brexit Odds Rise



Despite the Pound to US Dollar exchange rate rising considerably over late Monday’s trading sessions, the pairing has since dropped off, on account of recurrent Brexit fears.

The initial gains seen for Sterling came from the news that the UK could undergo a ‘Transitional Brexit’, which would keep the UK in the EU single market during the exiting period.

This expectation has been challenged by some ardent ‘Brexiteers’, however, as well as by Pascal Lamy, former WTO Director General. Partially dashing hopes that Brexit may go in the UK’s favour, Lamy stated that EU members were increasingly viewing a potentially shattering ‘Hard Brexit’ as the attitude to take to ensure no further exits from the EU.

Pound Sterling to US Dollar Exchange Rate Forecast for Losses on GDP Projections



The main UK economic data of the week will come on Friday, when the second estimates for Q3’s GDP growth rate figures are due to be released.

As it stands, a decline is expected on both the quarter and the year, which could throw thoughts of the UK shrugging off Brexit worries into question.

Ahead of this, Wednesday afternoon will bring a pair of Bank of England (BoE) speeches, from officials Kristin Forbes and David Rule.

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US Dollar Declines Overall after Trump Pledges January 20th TPP Trade Exit



While US domestic data has been limited so far this week, the US Dollar Pound exchange rate has nonetheless been shifted already by declarations from President-Elect Trump.

Today’s bombastic news from Trump has been that he is looking to withdraw the US from the Trans-Pacific Partnership (TPP) on his first day in office, which could scupper the deal entirely, according to some responders.

Among these has been Japanese Prime Minister Shinzo Abe, who met with Trump last week. According to the Japanese PM, without the US in the multinational trading agreement, it ‘has no meaning’.

US Dollar Pound Outlook: Turbulence Possible for USD on Incoming Home and Goods Data



The next movement for the US Dollar is expected to come from home and goods data, spread over Tuesday and Wednesday afternoon.

Tuesday’s existing home sales for October are expected to show a decline from 5.47m to 5.3m on the month, while Wednesday’s new home sales for the same period also have a drop expected, from 593k to 580k. For Wednesday afternoon’s durable goods orders, an improvement from -0.1% to 0.8% is predicted.

Closing off Wednesday’s US data will be the Fed’s minutes from its early November meeting.
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