Large Losses for GBP USD Rate, Supreme Court Decision sees Scottish Referendum Fears Return

January 24, 2017 - Written by Ben Hughes

STORY LINK Large Losses for GBP USD Rate, Supreme Court Decision sees Scottish Referendum Fears Return

The British Pound to US Dollar exchange rate saw a solid improvement on Wednesday as Sterling benefitted from news that the UK government would soon publish a ‘white paper’ report on its Brexit plan for MPs to scrutinise ahead of the planned Article 50 vote.

Demand for the US Dollar also remained weak as the US Trump administration continued to ramp up protectionist rhetoric, sending jitters across the foreign exchange market.

[Previously Updated 24/01/2017]

Worries over the uncertain economic outlook of the US have helped to boost the Pound to US Dollar exchange rate on Wednesday morning, trading 0.36% higher on its opening levels at 1.2576.

Demand for the Pound has also recovered from the negative initial reaction to the Supreme Court ruling, with investors hopeful that greater parliamentary scrutiny could limit the government’s more hard line Brexit plans.

[Previously updated 24/01/2017]

Pound Sterling US Dollar Slump Follows Devolved Nations Snub in Supreme Court Verdict

Although the UK Supreme Court rejected the Government’s Article 50 appeal as expected, this outcome still proved controversial as it denied devolved nations the chance to veto Parliament’s trigger of the article.

The Pound crashed on this revelation, as it once again raised the prospect that Scotland could hold another vote for its independence in order to remain part of the EU and its single market while the UK left.

Offering words of warning to Westminster was Scottish First Minister Nicola Sturgeon, who said;

‘If the UK government don't start showing Scotland some respect, I'll make sure that people across Scotland have the chance to choose our own future before the Tories drag us off an economic cliff-edge’.

Pound Sterling Forecast: Losses ahead if UK GDP Slowdown Forecasts Prove Accurate

One of the biggest remaining UK economic announcements this week will come on Thursday, when the UK’s GDP growth rate stats for Q4 are due.

In their preliminary forms, the growth rate is expected to slow from 0.6% to 0.5% on the quarter, with the annual figure falling from 2.2% to 2.1%.

The other non-data announcement of note will be a speech from Bank of England (BoE) Governor Mark Carney on Wednesday afternoon.

US Dollar Pound Exchange Rate Rises as President Trump’s Policies Start to Flow

After an ignominious start to the Trump presidency over the weekend, the 45th US President has now started to make his mark on US politics and the economy, for better or for worse.

As well as taking the US out of the Trans-Pacific Partnership (TPP) trade deal, Trump has been tipped to back massive oil pipeline projects as part of his bids to bring business back to the US and put the economy into overdrive.

This behaviour has been a far cry from an early media mishap by Trump’s press team and has broadly increased demand in the US Dollar. Additional US positivity has come from January’s Markit manufacturing PMI flash, which has risen above expectations.

US Dollar Forecast: Trump’s Policy Stream could Further Boost USD Demand

One of the biggest sources of influence on the US Dollar for the rest of the week is likely to remain President Trump, given that he has shown an eagerness to lay down as many plans as possible in his first days on the job.

More solidly, US Dollar movements are likely on Thursday’s Markit services and composite PMI flashes fall for January; current predictions are for a services rise from 53.9 to 54.4.

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