US Dollar improves against the Pound owing to Brexit uncertainty and US interest rate hike

Pound to Dollar Rate Pushed Higher by Falling Covid Cases and Weak Dollar

The US Dollar to Pound rate remains close to its best levels of 2018 as the uncertainty of Brexit continues to rumble on.

The vote on the Brexit deal was postponed last week after it became apparent that MPs would not have voted in favour of the current deal on offer. This then led to the Tories putting forward a vote of no confidence in Theresa May, but she managed to survive this with a win of 200-117 last week.

Since then Prime Minister Theresa May has continued to try and negotiate better terms between the UK and the European Union but at the moment it is unclear how much the current deal will be able to be amended.

Even yesterday Labour leader Jeremy Corbyn put forward a vote of no confidence in Theresa May but this appears to be more of a publicity stunt than anything else.

Federal Reserve expected to raise US interest rates

Turning the focus back towards what is happening in the US it is likely that the US Federal Reserve will once again raise interest rates for the final time this year.

The US economy has been one of the best performing economies during 2018, with falling unemployment and very strong economic growth. This has helped the US Dollar to remain extremely strong vs both the Pound and the Euro.

With the Bank of England also due to meet this week on Thursday there is likely to be no change on monetary policy, so it will be the comments made by any of the Bank of England members which are likely to influence GBP/USD exchange rates.

As we end the year I think we will see further Dollar strength so if you’re in the process of buying US Dollars it may be worth getting this organised before the end of the year as with an interest rate hike tomorrow this could see GBP/USD rates lower.

As the Brexit saga continues to drag on I can only see this affecting the Pound in a negative way in the weeks ahead so it is important that you are well prepared in the run up to the festive break.

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