Pound US Dollar Exchange Rate News: GBP/USD Climbs Despite Calls for UK Prime Minister to Resign

January 13, 2022 - Written by John Cameron

STORY LINK Pound US Dollar Exchange Rate News: GBP/USD Climbs Despite Calls for UK Prime Minister to Resign

GBP/USD Trades Higher Despite UK Political Uncertainty

The Pound US Dollar (GBP/USD) exchange rate is trending higher at the beginning of today’s session in spite of calls for the UK Prime Minister to resign after admitting he attended a social gathering at No 10 during the first lockdown.

At the time of writing, the GBP/USD exchange rate is trading at approximately $1.3740, up roughly by 0.2% from today’s opening levels.

Pound (GBP) Lifts Despite UK Prime Minister Under Pressure to Resign

The Pound (GBP) is firming against the US Dollar (USD) at the beginning of today’s session in spite of calls for the UK Prime Minister, Boris Johnson, to resign.

On Wednesday, Johnson apologised for his actions during the first lockdown in 2020.

Having first ignored the reports that he was in attendance of a ‘bring your own booze’ party at Downing Street, when outdoor gatherings were prohibited, Johnson has since offered his ‘heartfelt apologies’.

Johnson is asking for patience whilst Sue Gray, the senior civil servant in charge of the investigation, comes to a conclusion, and has since received some support from fellow MP’s, such as Michael Gove.

However, many MP’s, both Conservative and from the opposition, do not believe this is just, and are calling for Johnson to resign as Prime Minister.

Senior backbencher and select committee chairman, William Wragg, said:

‘I don't think it should be left to the findings of a civil servant to determine the future of the prime minister and indeed who governs this country.’

Minister, Rachel Maclean, said:

‘The law of the land applies to everybody…including the prime minister. The people that make the laws are also the subject of the laws and that's why we've got this due process of this inquiry, find out exactly what went on, and if any laws were broken there will be consequences.’

The political volatility is weighing on Sterling today, and limiting the Pound's gains against the US Dollar.

US Dollar (USD) Slips amid Risk On Sentiment

The US Dollar (USD) is facing headwinds against the Pound (GBP) this morning as marker risk appetite dents the appeal of the safe haven currency.

Despite the Federal Reserve chairman Jerome Powell’s hawkish announcement earlier in the week, investors are ‘selling the news’ and favouring risk-sensitive assets.

Moreover, Coronavirus case numbers continue to rise as President Biden aims to keep US economy open.

Janet Woodcock, the acting head of the Food and Drug Administration, said:

‘I think it’s hard to process what’s actually happening right now, which is [that] most people are going to get Covid, all right?

‘What we need to do is make sure the hospitals can still function … [that] transportation, other essential services are not disrupted while this happen.’

This is supporting USD’s appeal however, as further restrictions are currently unlikely to be imposed.

GBP/USD Exchange Rate Forecast: Will Fed Policymaker Speeches Support USD Appeal?

Looking ahead, the Pound US Dollar (GBP/USD) exchange rate is likely to be influenced by data scheduled for release throughout the rest of today’s session.

Later this afternoon, the ‘Greenback’ may be bolstered by speeches delivered by Federal Reserve policymakers, Patrick Harker and Charles Evans, as well as a testimony from Governor Brainard.

The ‘Greenback’ may be further supported by initial jobless claims for January which are forecast to drop from 207K to 200K.

On the other hand, December’s core PPI is predicted to slip from 0.7% to 0.5% which may hamper USD’s appeal.

Meanwhile, Sterling is likely to remain vulnerable to media headlines during today’s session as GBP data remains thin on the ground.

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