GBP/USD Exchange Rate Edges Higher as ERG Provide Lifeline for May’s Deal
The Pound US Dollar (GBP/USD) exchange rate is down today and is currently trading around $1.3180 on the inter-bank market.
Sterling has benefited today after the pro-Brexit European Research Group (ERG) showed signs of conceding to Prime Minister Theresa May’s Brexit deal today, with the ERG’s chair, Jacob Rees-Mogg, saying:
‘[N]o deal is better than Mrs May’s deal, but Mrs May’s deal is better than not leaving at all.’
The US Dollar (USD) fell against a Pound (GBP) today despite reassuring comments from the former Chair of the Federal Reserve, Janet Yellen, who eased fears of a possible US recession that has been haunting US markets for the past week.
Mrs Yellen said:
‘I don’t see a recession in the US as particularly likely. The US is certainly experiencing a slowing of growth and that is something that was long expected.’
Meanwhile, President Donald Trump is still celebrating his victory of being cleared of claims of Russian collusion.
Democrat leaders Chuck Schumer and Nancy Pelosi remained critical, however, saying in a joint statement:
‘The fact that Special Counsel Mueller’s report does not exonerate the president on a charge as serious as obstruction of justice demonstrates how urgent it is that the full report and underlying documentation be made public without any further delay.’
GBP/USD Exchange Rate Increases as No-Deal Brexit Fears Fade
Yesterday’s vote in the House of Commons which saw MPs effectively regain control over Brexit, following the majority support for the Letwin amendment at 329 votes to 302, left the Pound weak this morning on heightened Brexit uncertainty.
However, with signs that even some hard-line pro-Brexiteer MPs are beginning to warm up to May’s Brexit deal, this has eased many Sterling traders’ concerns of a possible no-deal Brexit.
Alistair Burt, meanwhile, has pushed for Parliament’s powers over Brexit, saying:
‘Parliament should seek urgently to resolve the situation by considering alternatives freely, without the instruction of party whips, and government should adopt any feasible outcome as its own in order to progress matter.’
USD/GBP Exchange Rate Falls as US Traders Await Housing Figures
US Dollar traders, meanwhile, will be awaiting the publication of the US Housing Starts figures for February today. Any signs of improvement could provide some uplift for the ‘Greenback’.
These will be followed by the US building permits figures for February, which, however, are expected to decrease.
Today will also see the printing of the S&P/Case-Schiller Home Prices Indices for January, which are expected to come in at 4.0%.
In political news, meanwhile, the Pentagon has agreed to provide Donald Trump with $1bn of funding for the controversial Mexican border wall.
The US Dollar has, however, failed to benefit from the recent turn of political events, with many ‘Greenback’ investors remaining cautious.
GBP/USD Forecast: Sterling Could Rise if DUP and ERG Back May’s Brexit Deal
USD traders are looking ahead to tomorrow’s publication of the US trade balance figures for January. However, as they’re expected to decrease this could prove negative for the ‘Greenback’.
The Pound US Dollar exchange rate, however, will remain dictated by Brexit developments for the rest of the week, with Sterling traders paying close attention to tomorrow’s vote by MPs on possible alternatives – or amendments – to May’s current Brexit deal.
Any indications that the ERG or DUP could back May’s Brexit deal would prove Pound-positive.