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British Pound to US Dollar Exchange Rate Volatile on Historic Brexit Start Day
Published: 29 Mar at 2 PM Tags: Pound Sterling, Dollar Exchange Rate, Currency Exchange, UK, Exchange Rates, Economy, Pound Dollar Exchange Rate,
The Pound to US Dollar exchange rate has seen a wide variety of movement thus far this week, surging on Monday before slumping on Tuesday evening and hitting a one-week-low on Wednesday morning while investors awaited the beginning of the Brexit process.
GBP/USD began this week trending at the level of 1.2475. After jumping to a two-month-high of 1.2609 on Monday the pair was knocked down by psychological resistance. On Wednesday morning the pair trended near a weekly low of 1.2344.
Pound (GBP) Volatile as Markets Prepare for Early Days of Brexit
The focus of the media and UK markets on Wednesday was the start of the Brexit process. After months of uncertainty and speculation that the process could be delayed, the UK government was indeed ready to activate Article 50 and begin the Brexit process before the end of March.
Sterling fell on Tuesday evening once it was confirmed that UK Prime Minister Theresa May had signed the letter that would go on to activate Article 50 on Wednesday.
Due to the Brexit focus, investors largely brushed over the day’s UK data. This included news that consumer credit had fallen less than expected in February, but February mortgage approvals fell further than expected.
Sterling’s movement was little changed after it was confirmed early on Wednesday afternoon that the Brexit process had officially begun.
US Dollar (USD) Recovers from ‘Trump Slump’ Selloff
Monday saw global markets grow uncertain about the future of the US economy after the weekend’s news that the US Trump administration had failed to push through healthcare reforms.
US President Trump being unable to find enough support to pass healthcare ignited speculation that he would also be unable to pass his proposed fiscal policy plans.
However, Tuesday’s American session saw the publication of a highly impressive US consumer confidence report from CB. The March print soared to 125.6 – its best result since 2000 – which increased market hopes that economic activity would remain strong.
Investors began to hope again that Trump may still be able to at least succeed with his planned tax cuts, which supported the US Dollar in the middle of the week.
GBP/USD Forecast: Could Strong UK Data Cool Sterling Jitters?
Q4 Gross Domestic Product (GDP) figures will be published for the US and UK towards the end of the week, which could help cool GBP/USD movement.
Thursday will see the publication of the final Q4 growth results for the US, which are projected to fall from 3.5% to 2%. If they beat expectations, the US Dollar could extend its recovery against Sterling.
Britain’s own final Q4 growth stats will be published on Friday. If they beat expectations, the Pound could find itself sturdier support to trade on. A particularly strong growth report could bolster 2017 growth expectations.
Brexit negotiations are not expected to begin in full for another few months, which means the Pound’s recent volatility is likely to fade towards the end of the week and next week regardless.
This week’s other US data is unlikely to have a considerable effect on GBP/USD. Personal spending and personal income figures from February will be looked over as they will do little to alter mid to long-term USD movement or Federal Reserve</a> interest rate hike bets.
However, Friday’s Michigan consumer confidence report could bolster the ‘Greenback’ if it beats expectations like this week’s other consumer confidence results have done.
GBP/USD began this week trending at the level of 1.2475. After jumping to a two-month-high of 1.2609 on Monday the pair was knocked down by psychological resistance. On Wednesday morning the pair trended near a weekly low of 1.2344.
Pound (GBP) Volatile as Markets Prepare for Early Days of Brexit
The focus of the media and UK markets on Wednesday was the start of the Brexit process. After months of uncertainty and speculation that the process could be delayed, the UK government was indeed ready to activate Article 50 and begin the Brexit process before the end of March.
Sterling fell on Tuesday evening once it was confirmed that UK Prime Minister Theresa May had signed the letter that would go on to activate Article 50 on Wednesday.
Due to the Brexit focus, investors largely brushed over the day’s UK data. This included news that consumer credit had fallen less than expected in February, but February mortgage approvals fell further than expected.
Sterling’s movement was little changed after it was confirmed early on Wednesday afternoon that the Brexit process had officially begun.
US Dollar (USD) Recovers from ‘Trump Slump’ Selloff
Monday saw global markets grow uncertain about the future of the US economy after the weekend’s news that the US Trump administration had failed to push through healthcare reforms.
US President Trump being unable to find enough support to pass healthcare ignited speculation that he would also be unable to pass his proposed fiscal policy plans.
However, Tuesday’s American session saw the publication of a highly impressive US consumer confidence report from CB. The March print soared to 125.6 – its best result since 2000 – which increased market hopes that economic activity would remain strong.
Investors began to hope again that Trump may still be able to at least succeed with his planned tax cuts, which supported the US Dollar in the middle of the week.
GBP/USD Forecast: Could Strong UK Data Cool Sterling Jitters?
Q4 Gross Domestic Product (GDP) figures will be published for the US and UK towards the end of the week, which could help cool GBP/USD movement.
Thursday will see the publication of the final Q4 growth results for the US, which are projected to fall from 3.5% to 2%. If they beat expectations, the US Dollar could extend its recovery against Sterling.
Britain’s own final Q4 growth stats will be published on Friday. If they beat expectations, the Pound could find itself sturdier support to trade on. A particularly strong growth report could bolster 2017 growth expectations.
Brexit negotiations are not expected to begin in full for another few months, which means the Pound’s recent volatility is likely to fade towards the end of the week and next week regardless.
This week’s other US data is unlikely to have a considerable effect on GBP/USD. Personal spending and personal income figures from February will be looked over as they will do little to alter mid to long-term USD movement or Federal Reserve</a> interest rate hike bets.
However, Friday’s Michigan consumer confidence report could bolster the ‘Greenback’ if it beats expectations like this week’s other consumer confidence results have done.
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Source: moneytransfer.co.uk