The Pound US Dollar (GBP USD) exchange rate beat a hasty retreat this morning amidst renewed Brexit Uncertainty.
Pound (GBP) Weakened as Brexit Concerns Grow
Sentiment in the Pound is sliding again this morning on the back on comments by Britain’s former envoy to the EU, Ivan Rogers who suggests that the government’s Brexit demands are akin to a ‘British fantasy land’.
Rogers told Parliament’s Treasury Committee yesterday;
‘The jargon in Brussels is Canada or Canada dry, the jargon in London is Canada plus plus plus, If you talk to people I know well in Brussels and other capitals about Canada plus plus plus, they regard this as British fantasy land and they say that’s not on offer.’
The former envoy also suggested that EU officials were expressing doubts on whether ‘sufficient progress’ would be made in Brexit talks before the next EU summit in December, prompting fears that trade negotiations could be delayed again.
US Dollar (USD) Bolstered by Fed Chair Speculation
The US Dollar recent resilience was shown again this morning, with sentiment remaining positive as markets speculate on the possibility of Trump appointing a more a more hawkish Chair to the Federal Reserve.
There current are currently three frontrunners in the running to chair the US central bank, current chair Janet Yellen, Fed Governor Jerome Powell and Stanford University professor John Taylor.
However US media reports that Republicans are currently favouring Taylor, a known hawk who analysts believe could speed up the pace of the Fed’s monetary tightening, increasing the appeal of the US Dollar.
It is not clear yet when Trump will announce his decision, but most observers believe he will make his choice before he begins a tour of Asia on the 3rd of November.
GBP USD Forecast: US GDP Figures to Impress Tomorrow?
Looking ahead the GBP USD exchange rate may tumble even further at the end of this week’s session as the US releases its latest GDP estimate.
Economists currently forecast that the US economy will have seen a solid 2.5% growth in the third quarter and although slightly down from the previous quarter’s 3.1% growth should still help to bolster confidence in the US Dollar.
Meanwhile investors in the Pound are likely to turn their attention to the Bank of England’s (BoE) policy meeting next week as markets remain unsure whether the bank will vote for a rate hike in November.
Current Interbank Exchange Rates
At the time of writing the GBP USD exchange rate was trending around 1.3217 and the USD GBP exchange rate was trending around 0.7565.