Home » GBP » GBP to USD » Pound to US Dollar (GBP/USD) Exchange Rate Edges Higher as Trump Agrees to Biden Transition

Pound to US Dollar (GBP/USD) Exchange Rate Edges Higher as Trump Agrees to Biden Transition

US Dollar Currency Forecast

GBP/USD Exchange Rate Rises as Safe-Haven Demand Slips as US Political Tensions Ease

The Pound to US Dollar (GBP/USD) exchange rate rose by 0.2% today, with the pairing currently trading around $1.336.

The US Dollar (USD) suffered from a sell-off of safe-haven assets today after President Donald Trump has finally conceded and cleared the way for the transition for President-elect Joe Biden.

As a result, global markets reacted positively to the news, interpreting it as a signal to relative political stability within the United States following the heated 2020 elections.

Russ Mould, an investment director at AJ Bell, said that both the smooth transition of power and oil prices has buoyed optimism in global markets, saying:

‘An upbeat day for the markets has been spurred by Donald Trump accepting the US presidency transition to Joe Biden must begin, thus implying a smoother than expected handover.

‘Also supporting markets was a pick-up in the Brent Crude price. Oil acts as an economic bellwether and the commodity has been on a tear for the past month, rising by more than 20% in value as markets start to become more optimistic about economic activity amid positive vaccine news.’

In US economic news, today will see the release of November’s Consumer Confidence Data.

Any significant downturn in US consumer morale could, however, dampen confidence in the American economy.

Nevertheless, the safe haven ‘Greenback’ could quickly pick-up if the outlook for the global economy deteriorates.

Pound (GBP) Edges Higher Despite Growing Concerns Over Brexit

The Pound edged higher this week owing to this week’s positive news about a British Covid-19 vaccine from Oxford’s AstraZeneca.

However, concerns over Brexit have begun to eclipse hopes for the UK economy, with the Bank of England’s (BoE) Governor, Andrew Bailey, saying that a no-deal could cause more harm to the economy than Covid-19.

Mr Bailey said:

‘It takes a much longer period of time for the real side of the economy to adjust to the change in openness and change in the profile of trade.’

Meanwhile, Chancellor Rishi Sunak also said that a deal was preferable but, despite that, the UK would ‘prosper in any eventuality’.

Any further downbeat commentary about Britain’s economy for 2021, however, would prove GBP-negative.

GBP/USD Outlook: Could Hopes of a UK-EU Trade Deal Boost Sterling This Week?

US Dollar (USD) traders will be looking ahead to tomorrow’s US Durable Goods Orders data for October.

If this points to a significant setback in the world’s largest economy, then we could see demand for the safe haven ‘Greenback’ increase.

Tomorrow will also see the release of the latest US jobs data.

Again, if this points to a high levels of unemployment, then the outlook for the American economy would deteriorate, boosting demand for safe-haven currencies.

The GBP/USD exchange rate will continue to be driven by speculation over Brexit and the UK’s Covid-19 situation.

Any signs of a possible post-Brexit trade agreement with the EU, however, would prove GBP-positive.