The GBP USD exchange rate plummeted by around a cent this morning as parliament blocked Labour’s attempts to amend the government’s Article 50 legislation.
GBP USD Slides as Parliament Block Opposition to Brexit Bill
The Pound tumbled against the US Dollar this morning as two major amendments Labour had sought to make to the government’s Brexit bill were rejected by the House of Commons.
The first amendment would have required Theresa May to make regular updates to MPs over the course of Brexit negotiations, while the other would have given the leaders of devolved governments the right to be consulted on the final Brexit deal.
Both were blocked by a majority of around 50 however, causing Sterling to slide as investors fear that there will be a similar outcome for the dozens of amendments that have been tabled by Labour, leaving the way clear for the PM to pursue her plans for a ‘hard Brexit’.
US Dollar Rises as March Rate Hike Seen as a Possibility
The US Dollar saw a slight uptick in demand following a speech from Federal Reserve Bank of Philadelphia President, Patrick Harker in which he said that a March rate hike could still be on the table.
Harker said that should the job market and wage growth remain robust then he would not rule out the Fed raising interest rates at its next policy meeting.
This follows a similar statement from his colleague John Williams from San Francisco in which he suggested that the Fed not rule out a rate hike next month, following a dovish statement from Fed Chair Janet Yellen at last week’s meeting.
GBP USD Exchange Rate Forecast: US Trade Balance Ahead
The GBP USD exchange rate may fall further this afternoon as analysts predict that the latest US Trade Balance figures will show that the trade deficit fell from $45.2bn to $45.0bn in December.
Meanwhile a mid-week lull in domestic data is likely to hinder the Pound’s chances to recover as investors remain focused on Brexit. With the start of negotiations set to begin by the end of new month it looks increasingly likely that the UK is on course for leaving the single market.
Current Interbank Exchange Rates
At the time of writing the GBP USD exchange rate was trending around 1.23 and the USD GBP exchange rate was trending around 0.81.
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