The Pound has made a small recovery against the US Dollar on this US Independence Day ahead of what should be a very eventful day in the UK on Friday. Much attention is already starting to focus on the cabinet meeting at Chequers where a new proposal for a customs relationship will be offered. Leaked reports are suggesting Prime Minister Theresa May will push forward with a soft Brexit which could see considerable market reaction for Sterling exchange rates.
Rates for GBP USD are sitting above 1.32 for the pair and any developments on Friday are likely to see the pair move. A softer Brexit which can be agreed within her cabinet is likely to see some confidence restored in the UK and in my view should see the Pound move higher. There is a risk though that Leave supporting ministers could make life uncomfortable for Theresa May or even force her resignation which would be damaging for the Pound. This in my opinion seems less likely to actually happen though.
Clients with requirements to either buy or sell Dollars would be wise to plan around this key event in the diary as a lot more detail should be offered which will direct Brexit and the price of Serling.
Friday is also the day that the US will actually impose the proposed tariffs on Chinese exports which sets processes onto motion and means things will now start to bite. Any developments here are likely to see the Dollar react and the reaction from China will also have an impact on the Dollar as well as some of the other major currencies. Any escalation in these trade disputes are likely to see the Dollar strengthen further as funds move back to the safety of the Dollar with its safe haven status.
With no US data today the economic focus looks to tomorrows jobless claims and services data as per the Purchasing Managers Index.
For more information on moving funds from pounds into dollars or selling dollars then please feel free to email me, James at firstname.lastname@example.org.