How will the US government shutdown impact sterling exchange rates?

Towards the end of last week French President Emmanuel Macron told a BBC reporter that the UK and EU could form a special arrangement something that UK Prime Minister Theresa May has eluded to over the last year. However the President also said the UK can not pick and choose what they want, and if fact would have to accept rules that the EU put in place.

With the commentary that we have been receiving over the last 8 weeks, it feels that a soft Brexit looks the likely. Thats not to see the UK will have full access to the single market however a trade deal looks extremely likely, which is only good news for sterling exchange rates long term.

Brexit stories are released daily with many having little impact on exchange rates. If you would like to be updated with Brexit stories that impact the value of sterling feel free to email me on [email protected].

In other news there the been a government shutdown in the US and I expect this story could have a major impact on sterling exchange rates this week. In recent week the pound has been making substantial gains against the US dollar and if the government remains shut on Monday I expect the pound to make further gains against the US dollar and GBPUSD to break through 1.40.

Unfortunately I don’t believe it’s going to be a good week for the pound vs the euro. EURUSD is the most traded currency pair globally. Consequently I expect to see a major sell of US dollars to buy Euros this week which will mean GBPEUR will fall.

Economic data released to impact sterling exchange rates this week is average earnings at 9.30am Wednesday. The consensus is for a further fall which will be a worry for the UK as average earnings is being outpaced by inflation. Again if this is the case I expect a tough finish to the week for the pound.

If you are trading another currency pair that I have not covered, feel free to email me with the pair (GBPUSD, GBPAUD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is [email protected] and I look forward to receiving your email.

If you are buying or selling sterling in the upcoming weeks and are looking to achieve the best possible exchange rates whilst receiving regular economic information feel free to email me with your requirements or call the trading floor on 0044 1494 787478 and ask for Dayle Littlejohn.