Last week’s high: $1.3343
Last week’s low: $1.2956
GBP/USD Exchange Rate Hit 9-Month High as No-Deal Brexit Odds Plunged
As Parliament voted to rule out a no-deal Brexit this helped the GBP/USD exchange rate to climb to its best level since June.
However, the Pound struggled to hold onto this boost for long as the sense of uncertainty surrounding Brexit failed to ease.
With Theresa May set to put her rejected Brexit deal back to MPs this week, for the third ‘meaningful vote’, the mood towards the Pound soon soured.
As February’s US consumer price index data fell short of expectations this put fresh pressure on the US Dollar, meanwhile.
While CPI is not the Federal Reserve’s preferred measure of inflation investors were still discouraged by this evidence that price pressures are failing to mount.
An increase in jobless claims also dented the appeal of the US Dollar, with confidence in the underlying health of the US economy continuing to fade.
Even so, this was not enough to keep the GBP/USD exchange rate on a stronger footing ahead of the weekend.
USD Outlook: Signs of Federal Reserve Dovishness May Limit USD Strength
No change in policy is expected at the Federal Open Market Committee policy meeting this week.
However, this could still provoke volatility for USD exchange rates if policymakers show increased signs of dovishness.
Any indication that the US central bank is likely to leave interest rates on hold for longer would limit support for the US Dollar.
With the prospect of an imminent US-China trade agreement fading, though, USD exchange rates could still benefit from an increase in market risk aversion.
The Pound, meanwhile, looks set to remain under pressure in the days ahead as speculation over Brexit continues.
Further GBP/USD exchange rate weakness may also be in store on the back of Thursday’s Bank of England (BoE) meeting minutes and policy announcement.
09:30 UK Average Weekly Earnings
09:30 UK Unemployment Rate
14:00 US Factory Orders
09:30 UK Consumer Price Index
18:00 Federal Open Market Committee Rate Decision
09:30 UK Retail Sales
12:00 Bank of England Rate Decision
If you need to make a USD transfer but don’t have an account with us, click here to get started.
Foreign Exchange Manager