Article 50 Appeal Proceedings See Pound US Dollar Exchange Rate Dip

December 5, 2016 - Written by Ben Hughes

STORY LINK Article 50 Appeal Proceedings See Pound US Dollar Exchange Rate Dip

Pound US Dollar Slips as Article 50 Appeal Case is Made

The Pound has been a struggling option during trading today, falling slightly against the US Dollar and making sporadic movements against other peers.

The day’s UK domestic data has actually been highly supportive, with both the composite and services PMIs for November rising above forecasts.

In spite of this, however, interest in the Pound has been severely limited by the ongoing Government appeal against Article 50 requiring Parliamentary consent.

This is expected to drag out for four days, and has already been mired in difficulties concerning misassigned documents and lengthy arguments on technical details.

Pound US Dollar Exchange Rate Predictions: Signs of Weakening Government Argument could Boost GBP Appeal

While UK domestic data is due out this week, the background news from Tuesday to Thursday will continue to be the Government’s appeal to the Supreme Court.

While events can be difficult to qualify to those not fluent in legalese, the Pound is broadly expected to rise in demand if judges don’t seem to be convinced by the Government's arguments.

On the data front, Sterling could advance if Wednesday’s UK industrial and manufacturing production results rise; currently, an advance is expected in all fields bar that of monthly manufacturing.

Closing off the week’s UK news will be October’s trade balance, which is expected to show a deficit reduction on the month.

US Dollar Uncertainty Seen despite Glut of Positive Data

The US Dollar has been able to rise against the Pound today, but has found itself unsettled elsewhere. This is likely owing to recent Trump news conflicting with more positive US data.

On the latter front, Fed official William Dudley has supported gradual rate hikes, while the ISM non-manufacturing PMI has risen above forecasts in November.

Less helpfully, President-Elect Trump has risked a feud with China by criticising the nation's monetary policy, as well as conducting a controversial phone call with Taiwanese President Tsai Ing-Wen.

US Dollar Pound Exchange Rate Outlook: Fed Rate Hike Odds may Rise Further on Bullard Speech

The next US economic activity will come in the evening when Fed official James Bullard gives a statement. While the odds of a December US interest rate hike are already high, Bullard may give comment that further fuels expectations of this actually taking place.

Following this on Tuesday afternoon will be the October trade balance, which is set to show a deficit expansion from -36.44bn to -39bn.

The other major news of the week will arrive on Friday, when the University of Michigan consumer sentiment score is announced. In December, a rise from 93.8 to 94.8 is expected.

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