The US Dollar and the Pound have a turbulent year ahead of them, though news to influence Sterling is likely to arrive sooner.
US Dollar Pound Exchange Rate Gains Follow UK Borrowing Expansion
The US Dollar Pound exchange rate has risen slightly today, though mainly on account of GBP weakness following a larger than-expected UK borrowing result.
The latest US data has been low-impact overall, with Redbook results for December showing a rise on the year and the month.
On the UK side, the November public sector net borrowing stats have seen a considerable deficit expansion, from -4.32bn to -12.21bn. Previously, forecasts had been for a smaller shift to -10.9bn.
This has triggered a change in sentiment among GBP investors, who had been positive given that Tuesday morning’s Confederation of British Industry (CBI) distributive trades stats for December had shown a rise in place of a predicted fall.
USD GBP Exchange Rate Outlook: Trump Follow-Through on Anti-Muslim Pledges may Weaken US Dollar Demand
Looking ahead to the coming year, 2017 is expected to see increased volatility for the USD GBP pairing, if only because of the soon-to-be President Trump.
Giving further insight into how he might enact policies on taking office on January 20th, Trump has recently responded to a series of terrorist attacks.
Citing this incident as well as others, Trump declared on social media that;
‘Today there were terror attacks in Turkey, Switzerland and Germany – and it is only getting worse. The civilized world must change thinking!’
Just what a change in thinking entails has been a point of significant future concern; if Trump holds true to declarations that all Muslims should be banned from entering the US as a safety measure, then the US Dollar can be expected to tumble dramatically against the Pound on the news.
Pound US Dollar Predictions: Supreme Court Appeal Result to Rock GBP in Early 2017
The first big news of 2017 for the UK will consist of the Supreme Court’s decision on whether the Government can trigger Article 50 by itself, or whether a Parliamentary discussion and vote is also required beforehand.
If the Government’s appeal to have sole power is rejected by judges, then the Pound is expected to rally, while a quashing of the previous ruling in Parliament’s favour is set to trigger a sharp slump in the Pound US Dollar exchange rate.
Recent Interbank Exchange Rates
At the time of writing, the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.80 and the Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.23.
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