Last week’s high: $1.2767
Last week’s low: $1.2482
GBP/USD Hit by Brexit Turmoil as Theresa May Dodges No-Confidence Bullet
After a mid-week recovery attempt, the Pound Sterling to US Dollar exchange rate ended last week lower. The US Dollar benefitted from weakness in rivals and its status as a safe haven currency, allowing it to capitalise on the Pound’s ongoing Brexit-related weakness.
For Sterling, the week was dominated by news relating to UK Prime Minister Theresa May, who kicked off the session by postponing a parliamentary vote on her Brexit agreement, causing the Pound to sink against the Dollar.
By Wednesday she was facing a vote of no-confidence from Tory rebels – a vote she survived intact, causing the Pound to rally across the board.
The Pound rally was short-lived, however, and it was back to regular programing by Friday as May failed to secure any concessions from EU leaders over her Brexit agreement, leading the Pound to Slump against the Dollar.
USD Outlook: Fed Rate Decision in the Spotlight
At the end of last week some better-than-expected US retail sales figures added a bit of glitter to the US Dollar, potentially increasing the odds of the Fed raising interest rates when it meets on Wednesday – odds which were already high.
The Fed won’t be the only bit of central bank action this week, with the Bank of England’s (BoE) upcoming policy meeting on Thursday likely to divert focus away from Brexit, albeit temporarily. Although no change in interest rates is expected, the BoE’s forward guidance note is likely to be analysed in detail for any clues as to the expected path of interest rates going into 2019.
UK retail sales will also be coming out on Thursday with focus likely to be on whether any signs of resilience are present. A day before that, though, we’ll get the latest UK inflation figures which will provide traders with an idea of how price pressures are shaping up at the end of Q4.
Friday will see Q3 GDP figures from both the UK and the US, with either result liable to be influential to the GBP/USD exchange rate pairing.
11:00 UK CBI Industrial Orders (Dec)
13:30 US Housing Starts (Nov)
09:30 UK Inflation Rate (Nov)
11:00 UK CBI Distributive Trades (Dec)
19:00 US FOMC Economic Projections Report
19:00 US Fed Interest Rate Decision
09:30 UK Retail Sales (Nov)
12:00 UK BoE Rate Decision
13:30 US Initial Jobless Claims (Dec)
13:30 US Philadelphia Fed Manu Survey (Dec)
00:01 UK Gfk Consumer Confidence (Dec)
09:30 UK GDP (Q3)
09:30 UK Public Sector Borrowing (Nov)
13:30 US GDP (Q3)
13:30 US Core Personal Consumption (Q3)
13:30 US Durable Goods Orders (Nov)
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