Mixed US Dollar news causes GBP/USD rates to move
The US dollar has been trading at close to a 3 year high recently against the pound. However, as a no deal Brexit appears less likely this has helped the pound to recover against the US dollar. Indeed, after hitting a recent low of 1.1958 the pound to US dollar exchange rates then moved upwards past 1.23 during Friday afternoon’s trading session. On Friday afternoon the US posted less expected new jobs with the latest US Non-farm payroll data. The expected figure was 153,000 but the figure showed just 130,000 new jobs created. However, the unemployment data showed 3.7% with a rise in the participation rate. This means that the US Federal Reserve may keep monetary policy the same. Arguably this is one of the reasons for the dollar’s fightback.
US Federal Reserve likely to cut interest rates
US President Donald Trump has criticized the Fed for quite some time for not cutting rates. He recently said on Twitter that ‘the Fed should lower rates. They were WAY too early to raise, and Way too late to cut’. US GDP data has been falling with the recent data showing growth of 1.9%. The expectation was for 2.1% so the pressure is mounting on the Fed to cut rates. Indeed, according to CME Group the chances of a rate cut next month is as high as 90%.
Brexit updates to move pound to US dollar exchange rates
As we begin this week the focus will remain on what is happening with Brexit. The latest news is that the government will ask MPs to agree a snap election. However, in order for an election to take place opposition parties want their law which calls to avoid a no-Brexit to be approved first. We could be in for a lot of movement on pound to us dollar exchange rates later today when the voting takes place so make sure you’re well prepared.
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