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Pound to US Dollar (GBP/USD) Exchange Rate News: US Dollar Hit by Political Deadlock over Mexican Border Wall

GBP/USD Exchange Rate Rises as the US Dollar Hit by Political Uncertainty

The Pound US Dollar (GBP/USD) exchange rate is up today, and is currently trading in the region of $1.2649 despite pressures mounting on British Prime Minister Theresa May to shorten MPs’ holidays to negotiate her Brexit deal ahead of the mid-January vote showdown.

Yesterday saw May shorten her Cabinet ministers’ holiday break by five days in order to prepare for a possible ‘no-deal’ Brexit situation, which has caused some alarm amongst Pound (GBP) investors.

The US Dollar (USD) found some strength yesterday on the release of the US continuing jobless claims for December, which showed a decrease.

These were followed by the release of the US housing price index figures for October which showed a bullish increase.

The US Dollar, however, has been struggling from political angst compounded by uncertain global economic factors such as US and China trade relations, thus dampening market confidence into the New Year.

GBP/USD Exchange Rate Up as Lull in Brexit News Eases Pressure on Sterling

Today saw the publication of the UK BBA mortgage approval figures for November which showed a 39.403K, down against the previous 39.640K, however this result was above forecast.

May has come under increasing pressure from opposition leader, Jeremy Corbyn, who has called for Parliament to return on 2 January rather than the currently set 7 January, saying:

‘I want us to have a vote as soon as possible, that’s what I’ve been saying for the past two weeks, and if that means recalling Parliament to have the vote let’s have it.’

The Pound has generally benefited from a lull in Brexit news, with the House of Commons set to return in January to discuss and vote on Theresa May’s Brexit withdrawal agreement.

US Dollar to Pound (GBP/USD) Exchange Rate Hit by Political Deadlock over Mexican Border Wall

The US Dollar has been weakened by continuing political uncertainty, with President Donald Trump in a heated deadlock with Democrats over funding for the Mexican border wall.

Donald Trump tweeted yesterday:

Today will see the release of the US Chicago PPI figures for December which are expected to be bearish, further dampening the US Dollar ahead of the New Year.

These will be followed by the US new home sales figures for November which are, however, expected to increase.

GBP/USD Outlook: Brexit and US Political Uncertainty to Remain in Focus

The GBP/USD exchange rate is likely to be driven by political forces rather than economic ones into the New Year.

Brexit will remain in focus for Pound investors, with Theresa May set to face Parliament on 7 January in an attempt to rally support for her Brexit deal.

USD traders, meanwhile, will be keeping a close eye on Donald Trump’ demand for funding for the Mexican border wall, which is causing increasing division throughout the US political landscape, leaving ‘Greenback’ investors feeling nervous.

Next week, on Wednesday, will see the release of the UK Markit manufacturing PMI for December which is expected to decrease, potentially weakening Sterling.

These will be followed, however, by the US Markit manufacturing PMI figures for December, with any signs of an increase potentially bolstering the ‘Greenback’.

Thursday, meanwhile, will see the printing of the US ISM manufacturing PMI figures for December which are expected to decrease.

Also on Thursday the UK will also see the release of the PMI construction figures for December, which are expected to decrease, potentially weakening the GBP/USD exchange rate.