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Daily Exchange Rate Forecasts & Currency News

PM May Fails to Calm Panicked Markets, Pound US Dollar Suffers

January 10, 2017 - Written by Tim Boyer

The Pound to US Dollar exchange rate plummeted on Wednesday afternoon, as US markets opened and traders became jittery as US President-elect Donald Trump held his first press conference since being elected.

Investors are anxious ahead of the beginning of the Trump Presidency amid high uncertainty about the unorthodox President, but hopes are high that he will stimulate the economy and could even pressure the Fed to hike US interest rates in 2017.

[Previously updated 10/01/2017

Pound US Dollar Weakness Extends as Fears of ‘Hard Brexit’ Rise

The Pound has been seriously struggling against the US Dollar during trading this week, on account of rising concerns that the UK could be torn out of the single market during Brexit proceedings.

EU single market access has been tied to allowing the free movement of EU nationals into the UK and an increased Government focus on limiting immigration has raised fears that this could cut off single market access by extension.

Although Labour leader Jeremy Corbyn has stated that he does not want restrictions on the rights of people that enter the UK, hints about reducing the overall number entering the country have only intensified concerns that losing the single market with a ‘Hard Brexit’ is incoming.

Pound Sterling US Dollar Predictions: Possible Rebound Incoming on Optimistic Forecasts for UK Production Stats

The Pound might be able to compose itself against the US Dollar on Wednesday morning given that recent UK data forecasts have been broadly positive.

Although the high-impact November trade balance doesn’t have any forecasts as to the outcome, construction output and production during the same month is expected to rise.

Of particular support could be the expected annual industrial and manufacturing production reports, both of which are expected to climb out of negative ranges.

Gains Seen for USD GBP Exchange Rate despite Trump’s Kushner Controversy

On a relatively slow data day for the US, the US Dollar has risen against the Pound by 0.2%, although US developments have been more concerning than supportive in recent days.

The latest national issue to emerge from Trump Tower has the appointment of Jared Kushner, Donald Trump’s son-in-law, as a senior advisor within his Presidential team.

Such readiness to flout the US’s anti-nepotism laws at the highest level has only raised concerns about abuses of power by the soon-to-be President and raises the question of what the next issue caused by Trump will be, as well as how it will influence the US Dollar.

US Dollar to Pound Exchange Rate Outlook: Struggle Expected between Fed Forecast Support and Trump News This Week

The main scheduled US news left this week will come from the Federal Reserve, with Fed speeches due in volume over Thursday and Friday.

If Monday’s comments from Fed officials Eric Rosengren and Dennis Lockhart are anything to go by, their fellow Fed officials may also offer optimistic statements on 2017, which could strengthen the odds of March seeing the first Fed rate hike of the year.

Going against any USD positivity caused by such speeches, however, may be unexpected developments from President-Elect Trump as he gears up for taking the Presidency on January 20th.

Given Trump’s frequent usage of Twitter and the ability to seemingly generate a daily controversy, the future value of the US Dollar remains in question.
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