Daily Exchange Rate Forecasts & Currency News
GBP/USD Forecast: Pound Hits Three Month Low as Brexit Trigger Date Announced
- Written by
Frank Davies
News that Article 50 of the Lisbon Treaty will be activated before the end of March 2017 caused GBP/USD exchange rates to fall to three-month lows.
Theresa May announced the deadline during her first appearance as Prime Minister at the Conservative Party conference, stating;
While bullish against the British Pound, the US Dollar is in a weakened state overall, with traders awaiting the afternoon’s high-profile US data.
Bets of monetary tightening from the Fed by the end of December currently estimate a 61.7% chance of higher interest rates, but today’s ISM manufacturing index could change that, keeping traders cautious for the time being.
However, the first of this week’s high profile North American datasets is forecast to climb back out of contraction territory, suggesting market odds on a rate hike will improve, boosting USD/GBP further.
Today’s manufacturing PMI, which rose from 53.3 to 55.4 against forecasts of a drop to 52.1, has helped to slow Pound Sterling losses.
Tomorrow’s construction PMI and Wednesday’s composite and services measures are also forecast to fall.
If they were to also outperform expectations, Pound Sterling could be set for a bullish recovery.
Another run of positive PMIs would likely see speculation over a further Bank of England (BoE) rate cut turn into postulation over whether the Monetary Policy Committee (MPC) may actually reverse recent stimulus measures and return interest rates to pre-referendum levels.
Stronger US Dollar appreciation could be on the cards, as USD also has support from the fact that Donald Trump’s presidential campaign has been dealt a significant blow.
The New York Times has obtained leaked tax documents which show that Trump claimed a loss of -US$961 million in 1995, which may have allowed him to avoid paying income tax on millions of Dollars in earnings.
Analysts believe the revelation could seriously harm Trump’s chances of entering the White House, suggesting it undermines his claims that he is a smart and successful businessman and that it has shown the Republican candidate to be a hypocrite after attacking tax avoidance in others.
STORY LINK GBP/USD Forecast: Pound Hits Three Month Low as Brexit Trigger Date Announced
News that Article 50 of the Lisbon Treaty will be activated before the end of March 2017 caused GBP/USD exchange rates to fall to three-month lows.
Theresa May announced the deadline during her first appearance as Prime Minister at the Conservative Party conference, stating;
‘I want to give British companies the maximum freedom to trade and operate in the single market – and let European businesses do the same here.’
US Dollar Holding Low levels ahead of ISM Manufacturing Index
While bullish against the British Pound, the US Dollar is in a weakened state overall, with traders awaiting the afternoon’s high-profile US data.
Bets of monetary tightening from the Fed by the end of December currently estimate a 61.7% chance of higher interest rates, but today’s ISM manufacturing index could change that, keeping traders cautious for the time being.
However, the first of this week’s high profile North American datasets is forecast to climb back out of contraction territory, suggesting market odds on a rate hike will improve, boosting USD/GBP further.
Will Remaining UK September PMIs Aid Pound Sterling Exchange Rate Recovery?
Today’s manufacturing PMI, which rose from 53.3 to 55.4 against forecasts of a drop to 52.1, has helped to slow Pound Sterling losses.
Tomorrow’s construction PMI and Wednesday’s composite and services measures are also forecast to fall.
If they were to also outperform expectations, Pound Sterling could be set for a bullish recovery.
Another run of positive PMIs would likely see speculation over a further Bank of England (BoE) rate cut turn into postulation over whether the Monetary Policy Committee (MPC) may actually reverse recent stimulus measures and return interest rates to pre-referendum levels.
USD Forecast to Rise on Trump Campaign Damage if ISM is Favourable
Stronger US Dollar appreciation could be on the cards, as USD also has support from the fact that Donald Trump’s presidential campaign has been dealt a significant blow.
The New York Times has obtained leaked tax documents which show that Trump claimed a loss of -US$961 million in 1995, which may have allowed him to avoid paying income tax on millions of Dollars in earnings.
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