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Pound US Dollar Exchange Rate: GBP/USD Sheds 1.5% as Brexit Vote Delay Pummels Sterling

December 10, 2018 - Written by John Cameron

The Pound Sterling US Dollar (GBP/USD) exchange rates plummeted today, and is currently trading down 0.8% at $1.2628, after the British Prime Minister Theresa May reportedly agreed to delay Tuesday’s Brexit vote.

Labour leader, Jeremy Corbyn, lashed out, commenting:

‘The government has decided Theresa May's Brexit deal is so disastrous that it has taken the desperate step of delaying its own vote at the eleventh hour.’

GBP investors have become skittish, with the delayed vote indicative of a general lack of confidence coming from the government over its own EU withdrawal deal.

The US Dollar (USD) is still recovering from last Friday’s poor non-farm payroll figures for November, which showed a worse-than-expected decrease against October.

Ongoing trade tensions between the US and China have also dampened investors’ confidence in the ‘Greenback’, with last week’s arrest of tech giant Huawei’s Meng Wangzhou stalling the US markets as events continue to unfold.

GBP/USD Exchange Rate Slumps as Sterling Pummelled by Poor Data Release Figures

The Pound (GBP) took a further pummelling from today’s data releases, which show UK manufacturing production for October decreased -0.9% – a fall of -1.1% against last month’s figures.

These were also followed by the release of October’s UK industrial production figures, which also showed a worse-than-expected decrease against last year.

The release of the UK’s non-EU trade balance figures for October also showed a significant decrease at £-4.251B against last month’s £-2.946B.

Following these were the UK goods trade balance figures for October, which topped off the weak data by showing a decrease.

Although these negative figures were buffered slightly by the release of October’s GDP figures, which increased very slightly above 0.0%, offering some recompense for the UK economy.

However, these data releases have been overshadowed by Brexit, with Tuesday’s crucial vote from Parliament on May’s UK-EU Brexit deal being delayed, throwing GBP into a state of volatility as increasing doubts dampen market sentiment.

US Dollar Pound Sterling (USD/GBP) Exchange Rate Soars despite Mounting Global Trade Tensions

oday will see the release of the US JOLTS job opening figures for October, which are expected to increase.

USD has been increasingly hit by concerns over the US and China’s increasingly tense relationship, with China’s Ministry of Foreign Affairs lashing out at the US’s treatment of Meng Wangzhou, who was arrested in Canada last week on charges of breaking US imposed sanctions on Iran.

The ministry’s website commented that the US had violated ‘legitimate rights and interest of Chinese citizens’ and continued by saying that ‘China will take further action based on the US actions.’

Tomorrow, meanwhile, will see the publication of the US producer price index for November, which is expected to decrease.

At the same time we’ll see the release of the US NFIB business optimism index for November, with investors taking note of any signs of an increase ahead of the holiday season.

GPP/USD Exchange Rate Outlook: Brexit in Focus after Vote Delay

The GBP/USD exchange rate will likely be driven by political factors this week, with the Brexit vote being extended and further increasing concerns over Theresa May’s withdrawal agreement exacerbating the political impasse.

Brexit renegotiations seem increasingly likely, with Children’s Minister Nadhim Zahwi tweeting that Theresa May had ‘listened to colleagues’ and is heading ‘back to Brussels to push back on the [Northern Ireland’s] backstop.’

USD investors, meanwhile, will be paying close attention to any developments between the US and China, with tensions mounting and putting increasing strain on the US economy.

Wednesday will see the release of the US consumer price index data for November, which is expected to increase.

Finally this will be followed by Wednesday’s release of the US monthly budget statement for November, with the result expected to be USD bearish.

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