GBP USD Exchange Rate Tumbles From Last Week?s Highs as US Election Looms

Modified: Monday, 7 November 2016 14:35 BST - Written by John Cameron

STORY LINK GBP USD Exchange Rate Tumbles From Last Week?s Highs as US Election Looms

The GBP USD exchange rate has begun slide from last week’s highs as it pressured by a strengthened US Dollar (USD) just a day before the US elections.

Pound Sterling (GBP) Boosted by High Court Ruling

The slide comes after Pound (GBP) had been trading as highest levels against the US Dollar since the Sterling flash crash around a month ago following a High Court ruling that the UK government would not be able to trigger Article 50 of the Lisbon Treaty without a vote of consent from the British parliament.

Market sentiment towards the Pound was markedly improved by the news as investors believe that it will hinder the governments attempts to pursue a ‘hard Brexit' in which access to the single market would be sacrificed in exchange for tighter controls on immigration.

Sterling was also boosted by the announcement that the Bank of England has decided not to cut rates from record lows of 0.25% as the Bank had been impressed by the growth of the British economy since the UK voted for 'Brexit' back in June.

Pound US Dollar (GBP USD) Exchange Rate Plummets as US Election Approaches

The Pound began to slide this morning as a resurgent US Dollar (USD) dominated markets ahead of tomorrow’s US presidential election.

The announcement that the FBI’s recent inquiry had cleared Democratic candidate Hillary Clinton of any wrongdoing in her email use while US Secretary of State has helped her campaign to once again edge in front of her Republican rival Donald Trump.


However the race remains close and investors are likely to remain dovish until the results are called early on Wednesday as they fear the impact that a Trump presidency may have on the US economy. Mohamed A. El-Erian, chief economic adviser of investment firm Allianz, suggested;

‘An equity market selloff is likely should Donald Trump win the presidential vote and also reaffirm his intention to move quickly on policy positions that disrupt long-standing trade relationships.’

GBP USD Exchange Rate Forecast: Pound US Dollar Likely to be Volatile in Last Day of Campaigning

The GBP USD exchange rate is likely to fluctuate in the run up to the US elections tomorrow as it continues to dictate global currency movements.

While both markets are set to release a slew of data tomorrow it is unlikely to cause any notable movement in the currency pairing as most of it is fairly low impact and traders are likely to remain focused on the elections.

GBP USD may sink further again as investors begin to digest the news that the UK government plans to appeal the High Court decision in the Supreme Court in December, as Prime Minister Theresa May says she is committing to beginning the 'Brexit' process by the end of March 2017.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates