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Pound US Dollar (GBP/USD) Exchange Rate Plummets as Lack of Brexit Progress Heightens No-Deal Fears

US Dollar Currency Forecast

GBP/USD Exchange Rate Falls despite Plummeting US Nonfarm Payrolls

The Pound US Dollar (GBP/USD) exchange rate is down today and is currently trading around $1.3056.

The Pound has plummeted as Brexit developments look ever shakier with no forthcoming developments on the important Irish backstop issue, and Prime Minister Theresa May’s withdrawal agreement looking increasingly unattractive to MPs ahead of Tuesday’s vote.

May urged MPs to get behind her deal, saying that there would be a ‘moment of crisis’ if it was rejected, adding:

‘My message to those MPs who agree with me that we should not risk that is simple: the only certain way to avoid it is to back the deal the government has secured with EU on Tuesday. Let’s get it done.’

The US Dollar (USD), meanwhile, gained against Sterling (GBP) despite the US nonfarm payrolls figures for February plummeting below expectations to 20K against the consensus of 180K.

These were buffered somewhat by better-than-expected unemployment rate figures for February, which fell to 3.8% against January’s 4.0%.

Ben Ayres, a Senior Economist at the investment bank Nationwide, said there was little cause for alarm, stating:

‘A shockingly low jobs figure for February does not change the labor market narrative by itself… The three-month trend in job gains remains solid while survey data suggest no letup in demand for workers by employers.’

Today also saw the publication of the US building permits figures for January, which improved at 1.345m against last year’s figures in December, which were 1.326m.

GBP/USD Exchange Rate Falls as Tory MPs Unlikely to Back May’s Brexit Deal

Today also saw Mark Francois, vice-chairman at the European Research Group, say that many Tory MPs were unlikely to support May’s deal.

Francois said:

‘[I]f there are really no changes to [the Irish backstop] or if the changes are all sort of weak and legally meaningless then you are basically asking the same question that you asked over a month ago. Logic suggests if you ask the same answer then you get the same answer.’

Pound investors have become increasingly jittery over the fact that the Attorney General, Geoffrey Cox, has failed to manifest any notable developments between the EU’s Brexit Negotiator, Michel Barnier, regarding the Irish backstop.

The Irish backstop remains fundamental to Theresa May’s vote passing through Parliament, and with no change forthcoming over this weekend, it is likely that we will see the Pound plummet ahead of the parliamentary decision.

GBP/USD Forecast: Pound to Rise if Brexit Deal Gains Backing Ahead of Vote

USD traders will be looking ahead to Monday’s publication of the US retail sales figures for January, with any increase likely to benefit the ‘Greenback’.

GBP investors, meanwhile, will be looking ahead to Tuesday, which will see the publication of the UK manufacturing production figures for January, and with any signs of improvement, this could prove Pound-positive.

The GBP/USD exchange rate will, however, be dictated by the outcome of the vote in the House of Commons on May’s EU withdrawal agreement on Tuesday, as well as any subsequent votes that may occur regarding the shape and form of the Brexit agreement.