Pound to US Dollar rate today: GBP/USD Finds Support above 1.30

Pound Continues to Benefit from Election Optimism

The pound to US dollar rate continues to find support with rates for GBP vs USD sitting over 1.31 despite ongoing uncertainty in these final stages of Brexit. Whilst Prime Minister Theresa May attempts to re-open the withdrawal agreement talks and seek legal assurances that the controversial Irish backstop will be time limited, the response from the EU has been very cold. The Brady amendment which found support in the House of Commons earlier this week gives the Prime Minister the mandate to go back to Brussels and seek a better Brexit deal.

The issue as far as the pound to US dollar rate is concerned is that the risk of a no deal Brexit cannot be ruled out. A further Parliamentary vote will take place on the 14th February and any announcements will help direct the GBP to USD pair. The next two weeks should leave the pound in a state of limbo which allows for much volatility and market reaction from any soundbites from politicians in the UK and EU. There could be some good buying opportunities in these next few weeks.

Today’s UK GDP numbers are likely to be overshadowed

Gross Domestic Product numbers for the UK are released this morning at 09:30, although this is likely to be overshadowed by any political murmurs over the final destination. The Bank of England meet next week for the interest rate decision although no change is expected with the pending Brexit developments.

US Federal Reserve hold interest rates

In the US the Federal Reserve held interest rates last night as widely expected and the markets are now trying to guess when the next rate hike may come. Fed Chairman Jerome Powell confirmed the Fed was in no hurry to raise rates and is keeping a close eye on the economic data.

The US Government partial shutdown has also ended after a period of five weeks and reports are suggesting that as much $11 billion may have been wiped off the US economy. This is hugely important for Donald Trump who to date has had a strong economy on his side. Any signs of a downturn could work against him politically although with the next elections in 2020 he may still have time to get those trade deals with China and the rest of the world signed ready for a big push on economic growth.

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