Pound to Dollar rates remain marooned under 1.30, with the US Dollar continuing to find plenty of support under this threshold.
The Pound did manage to claw back some ground last week, moving back above 1.27 but has failed to make further inroads ahead of next week’s key Brexit vote.
Movement this week on GBP/USD has been minimal, with investors seemingly waiting on the outcome of Tuesday’s vote, before making their next decisive move.
Pound to Dollar forecast: Expect increased GBP/USD volatility next week
Whilst the current feeling is not overly positive, UK Prime Minister Theresa May has been working hard to convince MPs that her Brexit deal is the best option on the table. Despite widespread concerns to the contrary, she remains outwardly confident of securing the necessary support. Whether this confidence is misplaced only time will tell but next week looks likely to bring with it increased volatility on GBP/USD exchange rates.
Moving the spotlight over to the US and President Donald Trump continues to remains steadfast in his commitment to building the US/Mexican wall. The cost of this is estimated to be around $5.7bn and the on-going dispute between the President Trump and the Democrats over how it will be funded has led to a Government shutdown.
If there is no resolution soon it could start to have a negative effect on the US economy and Trump’s position, which in turn could start to put some pressure on the greenback.
Despite its current standing, the US Dollar has failed to gain any sustained momentum during the early part of 2019, with investors concerned about a more dovish economic outlook for the year, with the stock markets in free fall and concerns over a potential economic fallout due to on-going trade disputes.
Therefore it may be that the US Dollar doesn’t find life quite as easy going during the first quarter of 2019, but of course much will depend on how Brexit unfolds.
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