Pound US Dollar (GBP/USD) Exchange Rate Muted as MPs Vote to Seek Article 50 Extension
This morning, the Pound US Dollar (GBP/USD) exchange rate slipped this morning before regaining some of its losses.
The pairing is currently trading at an inter-bank rate of $1.3272.
Last night, the UK House of Commons vote to seek an extension of Article 50 from the European Union.
Prime Minister, Theresa May said that Brexit could be delayed by three months to 30 June, but warned that a longer extension could harm trust in democracy.
The Prime Minister is now set to attempt to persuade MPs to back her Brexit deal for the third time, with the next ‘meaningful vote’ expected to take place on Wednesday.
If the withdrawal agreement is rejected yet again, the government has signaled it could result in a longer delay to Brexit depending on the approval of the EU-27.
European Council President, Donald Tusk has said that EU leaders could be open to a long extension ‘if the UK finds it necessary to rethink its Brexit strategy.’
US Dollar (USD) Dips as Trump Sparks Hope on Potential US-China Trade Deal
On Thursday, US President Donald Trump said that the US will probably know in the next three or four weeks about a potential trade deal with China.
During a St. Patrick’s Day reception, the President said:
‘We’ll have news on China. Probably one way or the other, we’re going to know over the next three to four weeks.’
This likely weighed on the ‘Greenback’ as it provided relief for investors, and USD fell against a handful of currencies.
US Dollar (USD) Muted as Jobless Claims Hit Four-Week High
Thursday saw the Pound US Dollar (GBP/USD) exchange rate fluctuate, although the pairing became muted later on Friday morning.
Data revealed that the number of Americans filing for unemployment benefits increased more than expected last week.
Continuing jobless claims rose to a higher-than-forecast 1.776m and initial jobless claims rose by 229K.
This suggested that the US labour market was slowing, although not to the extent that was implied by February’s near-stall in job growth.
Pound US Dollar Outlook: Will the GBP/USD Exchange Rate Rise on Contracting US Factory Orders?
Looking ahead to next week, Sterling (GBP) could slide against the US Dollar (USD) following the release of January’s UK average earnings.
Average earnings excluding bonuses are forecast to slip from the previous 3.4% to 3.3% which could cause sentiment in the Pound to slide.
However, average earnings including bonuses are forecast to rise to 3.5%, which could offset a drop in earnings excluding bonuses.
Tuesday afternoon will see the release of the US factory orders which could cause the ‘Greenback’ slip against the Pound.
If factory orders contract by -0.5% or greater in January, it could cause the Pound US Dollar (GBP/USD) exchange rate to rise.