Trump continues to pressure US Federal Reserve to cut interest rates
The pound to US dollar exchange rate last week saw the cost of buying US dollar fall to the lowest level since the beginning of July. This was following the Federal Reserve (Fed) decision to cut interest rates. They were cut by 0.25% and the Fed went on to signal that further cuts could be made if the economy starts to slow down.
President Trump has been an advocate of interest rate cuts as he would like to see increased growth. This could also potentially weaken the US dollar to make exports more attractive. He has been vocal about Fed Chairman Jerome Powell, even saying he is a “terrible communicator”. He went on to say he was “very disappointed” and tweeted on Sunday saying that he wants further rate cuts even hinting at negative rates.
“We should always be paying less interest than others” attempting to push the Fed towards further.
Sterling value dependent on Brexit news: Pound movement on back of Supreme Court ruling
Brexit continues to dictate the value of the pound and following yesterday’s supreme court ruling that Boris Johnson’s suspension of parliament was unlawful we saw the pound gain value. This could be perceived as lowing the probability of a no deal as some members of parliament may seek to block a no deal scenario occurring. Generally speaking the higher the probability of a no deal, the weaker you would expect Sterling to become.
Boris is yet to submit any alternatives to Brussels regarding the Irish back stop and considering there is little over a month to get a deal through this does not bode well for the pound.
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