What to expect this week for GBPUSD exchange rates

Pound to Dollar Rate Feels Weight of Covid Concerns

Cable (GBPUSD) has been on a steady decline in recent weeks and I expect a similer pattern could continue in the weeks to come. A robust US economy has helped the Federal Reserve to keep hiking interest rates and this trend looks like it will continue in the upcoming months and Brexit developments continue to weigh down the Pound’s value.

The key data releases to look out for this week are the Non Farm payroll number coupled with the unemployment rate and the Chequers meeting all on Friday.

Non Farm Payroll, which is the amount of new jobs created in the US, has a major impact on future monetary policy. In recent years the US have created a fantastic amount of new jobs which has kept unemployment levels at record lows. If this trend continues and I expect it will, the US Dollar will continue to strengthen.

In regards to the Chequers meeting, UK Prime Minister Theresa May has summoned her full cabinet as she plans to set out her own model for handling the customs union debate. Furthermore a white paper should be released next week outlining the UK’s position.

My personal opinion is that the UK appear to be no further forward in comparison to three months ago in regards to the Brexit negotiations. The conservative party are torn in two in regards to remaining part of the single market and customs union, and I expect this trend to continue. I believe either Theresa May is set to announce a super soft Brexit and there would be uproar within her party, or she will set out with a plan that is completely unreachable as the Europeans still have to approve it.

Therefore unfortunately I expect further losses for cable exchange rates. Good time to buy US Dollars in my mind. For more information, you can get in touch here.