The GBP USD exchange rate has spiked to a new weekly high today after car manufactures Nissan committed to building two new car models in Sunderland, helping the Pound (GBP) move further away from a 31-year low against the US Dollar (USD) on Thursday.
Pound (GBP) US Dollar (USD) Advances on Nissan News
The Pound rallied against the US Dollar (USD) early this afternoon after Nissan announced it would be building its new Qashqai and X-Trail models in Britain, signalling a major investment in its Sunderland factory.
Prime Minister Theresa May called the move a vote of confidence in the UK as she said;
‘It is a recognition that the government is committed to creating and supporting the right conditions for the automotive industry so it continues to grow – now and in the future.’
Nissan had been seeking concessions from the UK government in order to offset potential tariffs placed on cars exported to the EU in the event that Britain should lose access to the single market during ‘Brexit’ negotiations.
At least some of these concessions appear to have been granted as Nissan’s chief executive Carlos Ghosn said that the UK government’s support and assurances had been vital in deciding to manufacture the new models in Britain.
US Dollar May Reapply Pressure Later today if Data Impresses
The US Dollar may reverse Sterling’s recent gains later this afternoon should US durable goods orders for September come in higher than expected, with an increase from 0.1% likely to raise demand for USD.
An unexpected rise would also likely cause an additional increase in bets of a December rate hike from the Federal Reserve, helping to strengthen the ‘Greenback’ further.
GBP USD Exchange Rate Forecast: US Dollar Likely to Gain from GDP Report
The GBP USD exchange rate is likely to drop tomorrow as the US releases its latest GDP data, which is forecast to rise from 1.4% to 2.5% in the third quarter, potentially supporting expectations that US borrowing costs will be adjusted in December.
Friday will also bring Nationwide’s UK house price report which may cause the Pound to recede should it fall from 5.3% to 4.9% as predicted, although a surprise uptick could help bolster Sterling.
Current Interbank Exchange Rates
At the time of writing the GBP/USD exchange rate was trending around 1.22 and the USD/GBP exchange rate was trending around 0.81.
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