GBP/USD Exchange Rate Holds Ground Markets Digest Johnson’s Cabinet Reshuffle
The Pound US Dollar (GBP/USD) exchange rate is currently trading in a narrow range this morning, with Sterling holding on to Wednesday’s gains as markets digest the latest UK political headlines.
At the time of writing the GBP/USD exchange rate is rangebound this morning, with the pairing trading at around $1.2478.
Pound (GBP) Steady Ahead of PM’s Statement in Parliament
After claiming the title of strongest performer on Wednesday, the Pound (GBP) is currently consolidating its position against the US Dollar (USD) and the majority of its other peers this morning, following a flurry of political headlines over the past couple of days.
Boris Johnson was officially appointed as UK Prime Minister yesterday and he wasted no time in forming his new cabinet, sacking over half of those who had sat on Theresa May’s team and bringing on a number of Brexit supporting allies.
He also used his first speech as PM to reiterate his commitment to leaving the EU by the end of October as he said:
‘We are going to fulfil the repeated promises of parliament to the people and come out of the EU on October 31, no ifs or buts.’
Johnson will make a statement to parliament on his priorities for government later today, with GBP Investors likely to watch closely for any more details on how he plans to go about getting a new withdrawal deal from the EU.
US Dollar Poised to Rise on Stronger US Durable Goods Data
At the same time, the US Dollar (USD) may be re-energised this afternoon by the publication of the latest US durable goods figures.
Economists forecast that following on from a 2.8% contraction in April and another 1.3% slump in May, goods orders growth will have rebounded last month, rising 0.8% and helping to close out the second quarter on a more positive note.
However there is still the risk that the data could undershoot expectations again this month as Boeing’s 737 Max crisis continues to cast a long shadow on durable goods orders, which such an outcome likely to limit the appeal of the US Dollar.
GBP/USD Exchange Rate Forecast: Will Slowing GDP Cut the US Dollar Rally Short?
Looking ahead to the end of this week’s session, the main catalyst of movement in the Pound US Dollar (GBP/USD) exchange rate will undoubtedly be the publication of the latest US GDP figures.
This is expected to show that growth in the US economy slowed from 3.1% to 1.8% in the second quarter as the US-China trade war began to take its toll on domestic growth.
The drop in growth is likely to stoke speculation that the Federal Reserve could follow a rate cut this month, with further easing in the months to come, likely dragging on USD exchange rates.