GBP/USD rates are currently trading just above 1.31, with the pound finding some support around this threshold following yesterday’s losses.
Having seen its value increase against the greenback for much of last week, GBP came under pressure over the weekend. This drop in value came in line with news that a Brexit deal was yet to be agreed between the UK and EU, despite a number of reports to the contrary on Saturday.
It is believed that the Irish border issue remains the final sticking point, with a potential back stop arrangement not yet yielding any type of positive outcome.
There is still hope that a deal can be agreed, possibly even this week but until this has been confirmed the pound is unlikely to find any significant support against the USD.
Has the US economy peaked?
Whilst the US economy continues to post impressive numbers, last week’s crash in the global stock market has left some investors scratching their heads. US Unemployment remains close to a 50-year low, whilst their annual growth forecast is predicted to be around 3%. Impressive statistics but could the US economy have reached its peak?
It has been said that Trump’s tax cuts were not particularly well timed, whilst a slowdown in the global economy, along with growing debt, were also cited as reasons behind last week’s sharp sell-off.
If we look at the current value of GBP/USD, those holding the greenback may consider that the downside risk outweighs the upside returns.
Whilst USD did find some support yesterday, last week’s losses alongside a prospective Brexit deal in the next few days mean that I would be surprised to see a move back under 1.30 this week.
For more information on the Brexit update expected this week or the other factors likely to influence GBP/USD exchange rates, please send me a message using the form below and I will happy to respond personally to discuss your query.