November 22, 2018 - Written by David Woodsmith
STORY LINK Pound-to-Dollar Outlook: GBP/USD Rate Soars on Brexit News
Pound Sterling to US Dollar (GBP/USD) Exchange Rate Surges on Brexit News
The Pound Sterling US Dollar (GBP/USD) exchange rate surged around 0.7% today and is currently trading at USD$1.2870 after favourable Brexit news following Wednesday’s meeting between Prime Minister Theresa May and EC President Jean-Claude Juncker.
USD meanwhile faced downside pressure as some weaker-than-expected economic data in the form of a marked drop in October’s durable goods orders bolstered Sterling’s gains.
With US markets closed today for Thanksgiving, GBP/USD trade is thin.
Pound Jumps 1% against US Dollar (GBP/USD) Following Brexit Draft Agreement
The GBP/USD exchange rate jumped more than 1.1% against the dollar today, following the news that a draft agreement had been struck between the UK and the EU.
Shortly after the news was announced European Council President Donald Tusk Tweeted:
'I have just sent to EU27 a draft Political Declaration on the Future Relationship between EU and UK. The Commission President has informed me that it has been agreed at negotiators’ level and agreed in principle at political level, subject to the endorsement of the Leaders.'
News that May’s meeting with Juncker on Wednesday had resulted in a ‘deep and ambitious’ declaration on EU-UK trade, saw investors’ confidence in the Pound (GBP) leap.
Theresa May went on to say:
‘This is the right deal for the UK. It delivers on the vote of the referendum. The British people want this to be settled. They want a good deal that sets us on course for a brighter future. That deal is within our grasp and I am determined to deliver it.’
US Dollar to Pound Sterling Exchange Rate Slides over Thanksgiving
The US Dollar Pound Sterling (USD/GBP) exchange rate slipped today as Thanksgiving quietens market volume, while the Sterling rallies amid ongoing Brexit developments.
The USD took a hit yesterday after disappointing figures coming in the form of October’s durable goods figures, which were reported to have dropped -4.4% against the previous month’s 0.1% increase.
As the Thanksgiving holiday leaves the US Dollar (USD) in a relative stasis, the Pound could make up more ground on the ‘Greenback’ as Brexit news continues to unfold.
GBP/USD Outlook: Sterling could Rise if Encouraging UK-EU Development follow Sunday’s EU Council Summit
The Pound Sterling US Dollar (GBP/USD) exchange rate may see further developments over Germany’s Angela Merkel threat to pull out of the EU summit on Sunday over any signs of in-fighting.
Tomorrow will see the publication of US PMIs, with expectations looking generally bearish.
However, any unexpected increase could see the US Dollar (USD) reawaken after the Thanksgiving holiday if there are signs of a stronger economy heading into the end of the year.
Looking forward, the main focus is likely to be on the Pound (GBP) as Brexit developments are rapidly reaching a crucial stage at Sunday’s emergency UK-EU summit.
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TAGS: Pound Dollar Forecasts