March 28, 2019 - Written by John Cameron
STORY LINK US Dollar Pound (USD/GBP) Exchange Rate Steadies on Second Round of US-China Trade Talks
USD/GBP Exchange Rate Flat as Trump’s Political Tensions Flare Up
The US Dollar Pound (USD/GBP) exchange rate is steady today and is currently trading around £0.7606 on the inter-bank market.
The ‘Greenback’ stabilised against Sterling today despite political tensions once again heating up between President Donald Trump and the former FBI Director James Comey, following the effective ending of the Russian collusion claims held against Trump’s 2016 election campaign.
Comey criticised the report into the allegations, saying:
‘I'm not prejudging it – I'm just saying it doesn't make sense on its face, and so I have a lot of questions.’
US-China trade talks, meanwhile, are going ahead today as US negotiators head back to Beijing for another round. Any signs of a consensus emerging between the two superpowers could see the US Dollar rise.
Many USD traders, however, are remaining sceptical as the lawsuit over China’s tech giant, Huawei, has driven a wedge between the two nations.
Robert Atkinson, the US President of Information Technology, commented:
‘I don't think you're ever going to level [the differences] ... the distorted playing field is just so entrenched, in all that China does. It would be a long, long time before it would be completely level.’
USD/GBP Exchange Rate Rangebound as US Dollar Traders Await US Jobs Figures
US Dollar traders will, however, be awaiting the publication of the US jobs figures today, and with any signs of improvement this could see the USD/GBP exchange rate edge higher.
Today will also see the release of the US GDP figures for the fourth-quarter, which are expected to decrease.
These will be followed by the US Personal Consumption expenditure prices figures for the fourth-quarter.
Richard Clairida, the Vice Chairman of the Board of Governors at the Federal Reserve, is due to deliver a speech today, and any further signs of dovishness from the Fed could see the ‘Greenback’ weaken.
GBP/USD Exchange Rate Steadies as MPs Reject All Brexit Proposals
The Pound (GBP) steadied against the US Dollar (USD) today following last night’s parliamentary ‘indicative’ votes in which MPs rejected all 8 proposals on the UK’s withdrawal from the EU.
This has put increasing pressure on Prime Minister Theresa May to push forward with her Brexit deal, and after last night’s grand gesture in which she said she would step down if it was passed, the DUP have still remained resilient to changing its position.
Boris Johnson, the ex-Foreign Secretary, however, said he would back May’s deal.
‘Sometimes you just have to make a judgement. We have got to get this thing over the line. I genuinely think that unless this thing gets through, the House of Commons is going to steal Brexit.’
Brexiteer Jacob Rees-Mogg has also signalled his support for May’s Brexit deal, saying that the choices is either ‘Mrs May’s deal or no Brexit.’
Doubts, however, are setting in over the possibility of a third ‘meaningful vote’ at all, with the House of Commons speaker, John Bercow, saying that it would only go ahead if there were ‘significant changes’.
USD/GBP Forecast: Sterling Could Rise if May’s Brexit Deal Gains Support
Tomorrow will see a raft of US economic data releases, with many ‘Greenback’ investors focusing on the publication of the US homes figures and the Michigan Consumer Sentiment Index figures for March.
Any signs of improvement could see the USD rise against the Sterling.
The Pound US Dollar exchange rate, however, will remain dictated by Brexit developments for the rest of this week, with any indications of more MPs backing Theresa May’s Brexit deal potentially proving Pound-positive.
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