Pound US Dollar (GBP/USD) Exchange Rate Slips as No-Deal Brexit Risk Increases
The Pound Sterling US Dollar (GBP/USD) exchange rate slipped and the pairing is currently trading at an inter-bank rate of $1.2191.
This morning, the pairing slumped to a fresh weekly low as no-deal Brexit fears increased.
On Wednesday, reports revealed that UK parliament will be suspended only a few weeks before the Brexit deadline.
Parliament will be prorogued from the second week of September until 14 October.
Following the decision, House of Commons Speaker, John Bercow stated it was a ‘constitutional outrage’.
Commenting on this, Jim Reid, Analyst at Deutsche Bank noted:
‘The reality now is that under the new schedule, UK parliament has just under a week in early September followed by just over a week in late October to prevent a no deal outcome.’
Mnuchin: US-China Trade Talks Will Continue
Meanwhile, US-China trade tensions continue as Chinese imports are set to be hit by further tariffs on 1 September.
The Trump administration has stated there will be an extra 5% tariff on $300 billion worth of Chinese goods.
Meanwhile, US Treasury Secretary Steven Mnuchin stated that trade talks will continue, but did not say when.
Mnuchin noted that Chinese trade officials are expected to visit Washington, and stated:
‘We continue to have conversations. We’re planning for them to come.’
Added to this, today China’s Commerce Ministry said both sides were discussing in-person talks to be scheduled in September.
Commenting on this, market strategist at Sumitomo Mitsui Trust Bank Ltd. in Tokyo, Ayako Sera noted:
‘There’s no appetite to actively trade equities right now.
‘There will be another round of tariff increases on Chinese goods at the start of September. Investors’ current stance probably is to see through carefully what kind of impact the latest tariff hike has on the global economy.’
Pound US Dollar Outlook: Will USD Slide as US GDP Disappoints?
Looking ahead to this afternoon, the US Dollar (USD) could fall against the Pound (GBP) following the release of the US GDP growth rate data.
If the second estimate reveals that quarter-on-quarter growth is not as high as forecast, Dollar sentiment could be left dampened.
Meanwhile, Sterling could slide further on Friday following the release of the UK GfK consumer confidence data.
If confidence slumps further than expected in August, the Pound US Dollar (GBP/USD) exchange rate could fall.