Currency News

Daily Exchange Rate Forecasts & Currency News

Pound to US Dollar (GBP/USD) Exchange Rate Falls as US Election Uncertainty Boosts Safe-Haven Demand

November 4, 2020 - Written by John Cameron

pound-to-dollar-rate-4


GBP/USD Exchange Rate Falls as US Elections in Focus


The Pound to US Dollar (GBP/USD) exchange rate fell by 0.8% today, with uncertainty over the result of US general election remaining in balance, with Democrat presidential candidate Joe Biden currently leading at 238 to 213.

Consequently, safe-haven demand for the ‘Greenback’ soared over night as the election between who will be the new US President has heightened market volatility.

Lee McDarby, the managing director of UK International Payments at MoneyCorp, commented:

‘The world, the markets, and investors wait on tenterhooks this morning, as the US election heads for a tight result.


‘Fresh in the collective memory is the chaos of 2000 and closeness of 2016, and as Biden’s blue wave struggles to meet expected momentum, it looks as though the US election will continue to play on throughout this week.’


As the mood generally remains cautious, the USD/GBP exchange rate will likely continue to head higher throughout today’s session as tensions mount over the US 2020 presidential elections.

Ariel Bezalel, an analyst at Jupiter Asset Management, commented:

‘The result of the US election is still uncertain but the ‘Biden reflation trade’, which had been increasingly priced in by markets, is already starting to unwind as investors reassess risk.’


Pound (GBP) Falls Ahead of Parliamentary Vote on UK Lockdown


The Pound (GBP) fell today ahead of today’s UK Parliamentary vote on the nationwide lockdown.

However, with both parties – the Conservatives and the Labour Party – likely to vote in favour of the new measures, GBP investors are concerned for the British economy in the months ahead.

While Prime Minister Boris Johnson has insisted that the lockdown will only remain in place until December 2nd, British markets are remaining notably cautious.

Penny Morduant, the Paymaster General, has also warned that the UK could expect at least three Covid-19 waves and lockdowns.

Consequently, this has further dampened market optimism in Sterling as the future remains largely uncertain.

Speaking in Parliament, Morduant said the Government was ‘hopeful of being able to unlock in December but they are being driven by the data.’

Meanwhile, the lack of solid news on Brexit has left Sterling investors feeling cautious, as UK-EU trade talks still show no signs of progress towards a post-Brexit trade deal.

GBP/USD Outlook: Sterling to Fall as UK Enters Second National Lockdown


The US Dollar (USD) will likely remain volatile over the next few days as markets absorb news of the US Presidential elections.

Any further complications – or an extended period of uncertainty – would further boost safe-haven demand for the ‘Greenback’.

Tomorrow will see the Federal Reserve’s Interest Rate Decision. But with the bank expected to hold at 0.25%, and US political developments still in focus, this may have little impact on the USD/GBP exchange rate.

The GBP/USD exchange rate will likely continue to fall over the next few days as the UK enters its second national lockdown.



Like this piece? Please share with your friends and colleagues:

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: American Dollar Forecasts Pound Dollar Forecasts

Comments are currrently disabled