Pound hits highest rate vs US Dollar since May 2019
The pound to US dollar exchange rate hit its highest level yesterday since mid-May after it appeared as though the Brexit talks are proceeding in the right direction. However, this morning the DUP announced that it would not be able to support the deal in its current form.
The issues that the DUP are concerned with are the lack of clarity concerning both customs and consent issues. We are now just two weeks from the official deadline of 31st October when the UK is due to leave the European Union. However, as time is running short, there is an expectation of an extension coming in the near future.
Impact of the Benn Act
According to the Benn Act this would require the Prime Minister to write to the European Union to ask for an extension until the end of January 2020. However, prior to this taking place we could see a vote taking place in parliament which will be an attempt to get the current bill approved this weekend.
The decision as to whether or not this will take place will be announced later today by Jacob Rees Mogg. If the vote does take place over the weekend, we could potentially see some volatility on GBP/USD exchange rates so make sure you’re well prepared for what could be a very volatile start to next week.
US economic data
US Retail Sales figures fell by -0.3% which was lower than last month’s data which showed 0.3% and with the US Federal Reserve bank having cut interest rates last month this could be further evidence in support of another interest rate cut to come.
Later this afternoon the US will release the latest Initial Jobless Claims figures so any change could cause movement on GBP/USD rates in the early afternoon.
However, what is likely to be the overwhelming factor in determining exchange rates between the pound and the US dollar will be the latest announcements from Brexit.
If you are looking to make a currency transfers involving either GBP/USD, feel free to contact myself using the form below for the latest factors affecting the exchange rates.