September 26, 2019 - Written by John Cameron
STORY LINK Pound US Dollar (GBP/USD) Exchange Rate Eases on Early General Election Fears
GBP/USD Exchange Rate Decreases on UK Political Deadlock
The Pound US Dollar (GBP/USD) exchange rate eased today, with the pairing currently trading around $1.234 after a defiant Prime Minister Boris Johnson has further exacerbated fears of an early general election, while maintaining that the UK will leave the EU on October 31.
Labour Leader Jeremy Corbyn commented:
‘He says he wants an election. I want an election. If he wants an election, it’s very simple. Get an extension and we’ll have an election.’
As a result, Sterling has remained subdued against the ‘Greenback’ today as Parliament remains in a state of deadlock, with the opposition parties wanting the Conservative Government to completely shelve a no-deal Brexit before calling for an early election.
Meanwhile, today will see Sir John Cunliffe, the Deputy Governor for Financial Stability at the Bank of England (BoE), deliver a speech. Any downbeat remarks about the state of the UK economy could further weigh on Sterling.
USD/GBP Exchange Rate Edges Higher on Deteriorating Risk Appetite
The US Dollar (USD) has continued to benefit from a deteriorating risk appetite following increasing global political and economic tensions surrounding the UK’s Brexit and US-China trade relations.
Trade tensions between the two superpowers increased after China called for the US to ‘remove all unreasonable restrictions’ over trade, placing the two superpowers in a tense position ahead of next month’s trade talks in Washington.
Wang Yi, Chinese State Councillor and Foreign Minister, commented:
‘China-U.S. relations today have once again come to a cross roads. While China opens wider to the U.S. and the rest of the world, we expect the U.S. to do the same to China and remove all unreasonable restrictions. In a word, China’s efforts and achievements of reform and opening up in the past several decades have been widely recognized. They should not be deliberately ignored or denied.’
Meanwhile, the US Dollar could edge higher against the Pound if today’s publication of the US Q2 GDP figure improves. These will also be followed by US jobs figures, which could further bolster the ‘Greenback’ if they show signs of improvement.
GBP/USD Outlook: US Goods Orders in Focus
Sterling traders will be looking ahead to September’s GfK consumer confidence figure, which is expected to hold at -14. As a result, we could see Sterling continue to fall against the US Dollar.
Tomorrow will also see a speech by Michael Saunders, a member of the BoE’s Monetary Policy Committee. Any indications that the UK economy could suffer ahead of the Brexit deadline could prove Pound-negative.
US Dollar investors, meanwhile, will be awaiting the publication of August’s US goods orders. As these are expected to ease from 0.2% to 0%, the GBP/USD exchange rate could begin to edge higher.
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: Dollar Pound Forecasts Pound Dollar Forecasts