GBP/USD Exchange Rate Stalls Ahead of Brexit Talks
The Pound US Dollar (GBP/USD) exchange rate was left in a holding pattern on Wednesday morning as markets braced for the latest round of Brexit talks later this evening.
At the time of writing the GBP/USD exchange rate is virtually unchanged this morning, having skyrocketed on Tuesday amidst renewed Brexit optimism.
Pound (GBP) Exchange Rates to Surge if New Brexit Legal Text Agreed?
The Pound (GBP) roared higher on Tuesday, with the GBP/USD exchange rate pushing back above $1.30 on the back of speculation that the UK and EU were working on a new legal text regarding the Irish backstop.
This will be put to the test later today when Theresa May travels to Brussels for the latest round of talks with European Commission President Jean-Claude Juncker.
Should such a breakthrough materialise following today’s talks its highly likely be could see Sterling extend its gains even further.
Dovish FOMC Minutes to Soften US Dollar (USD)?
At the same time the US Dollar (USD) may face some pressure later this evening following the release of the minutes from the Federal Open Market Committee’s (FOMC) January meeting.
The Federal Reserve underwent a notably dovish shift last month, dropping all mention of ‘further gradual’ rate rises after previously signalling it could raise interest rates up to two times in 2019.
USD investors will understandably be hoping that the minutes will provide more clarity regarding the Fed’s monetary policy path this year, with the US Dollar likely to weaken if the minutes indicate that the current rate hike cycle has reached a conclusion.
GBP/USD Exchange Rate Forecast: Bump in US Goods Orders to Boost the US Dollar?
Looking a little further ahead to the second half of this week’s session, the Pound US Dollar (GBP/USD) exchange rate looks set to stumble on Thursday with the release of the latest US durable goods order figures.
Economists forecast that order growth will have jumped from 0.8% to 1.5% in December, likely boosting the appeal of the ‘Greenback’ as it helps to dampen concerns that US economic activity is slowing.
In the meantime the Pound may be bolstered by the publication of the UK’s latest public sector borrowing figures tomorrow morning as analysts predict that strong self-assessment tax returns will result in a bumper January surplus.