Pound to US dollar forecast: Will a Brexit extension push GBP/USD higher?

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We are now just 3-days from the deadline date for the current Brexit extension, which as it stands lasts up until this Friday. The pound remains range bound as the markets appear to be tired of the Brexit related headlines and rumours, with only official news now likely to impact GBP exchange rates now that we’re this close to either a no-deal Brexit or another extension.

MP’s within the UK have voted against a motion regarding the UK departing without a deal in place. Today UK Prime Minister Theresa May is travelling to Paris and Berlin for meetings with the French and German leaders to discuss a potential Brexit extension prior to tomorrow’s key EU summit.

It’s public information that May would like to extend the Brexit arrangement up until the 30th of June although rumours persist that the EU leaders would prefer a longer extension with some leaders such as EU Commissioner Donald Tusk outlining a year long plan with some flexibility.

This week I expect Brexit related discussions, and in particular official updates regarding it to be the main influence on the GBP/USD value and my personal take is the longer the timescale that UK and EU negotiators have the higher we could see sterling climb.

The US dollar when compared across the board of major currency pairs has been a strong performer over the past year although the greenback is beginning to lose some value as the Fed adopts a less aggressive monetary policy. There are no interest rate hike plans this year and some commentators believe there could even be cuts. One topic for those of our readers following the US dollar to be aware of is the US and China trade talks, as once this matter has been resolved I think we can expect to see the US dollar climb.

If you wish to be alerted if the GBP/USD rate spikes in either direction this week or in the future, do feel free to register your interest with us. You can reach me directly using the form below.