industry

Pound US dollar exchange rate: GBP steady after Theresa May Brexit update


The Prime Minister spoke in the House of Commons yesterday and stated that the UK was offering EU negotiators a fresh customs arrangement to move talks along.

Indicating that this might be a viable path to take in the future, Mrs May said: “In a substantial shift in their position since Salzburg, the EU are now actively working with us on this proposal.”

Although Mrs May declared that Brexit talks are “95 per cent” complete, the remaining five percent, Northern Ireland, has been a sticking point since the EU Referendum vote.

This explains the limited demand for Sterling today, as pound traders are still sceptical about there being an immediate solution to the Irish border issue.

Another factor limiting pound US dollar exchange rate movement has been a report suggesting that intense work is needed to convert EU laws into UK versions.

The Hansard Society has estimated that only around nine per cent of approximately 800-1000 statutory instruments (SI) have been adjusted so far, which leaves a mountain of tweaks to make in an ever-shortening space of time.

Ruth Fox, Director at the Hansard Society, said: “If the government does not increase the pace, Parliament will shortly be faced with the impossible task of scrutinising too many SIs in too little time.

“The government promised it would try to avoid a ‘peak and trough’ approach to the production of the SIs so Parliament could do its scrutiny job properly. It needs to deliver on that promise.”

The US dollar has made a minimal advance against the pound today, but exchange rate gains have remained limited due to worries about a global economic slowdown.

A Reuters poll of 500 leading economists has revealed that respondents are predicting worsening global trade conditions in 2019, coming as a consequence of the US-China trade spat.

Experts also predict that the US Federal Reserve could be causing difficulties.

They said: “A Federal Reserve that is raising interest rates to prevent the US economy from overheating is constraining the policy options of countries where financial conditions are tightening and trade tensions intensifying.”

With respondents predicting worse relations between the US and China in the future, the poll results have had a negative influence on US dollar demand.

Looking ahead, the next set of ecostats to watch out are Confederation of British Industry (CBI) industrial orders and business optimism figures out this morning.

Pound US dollar losses could intensify when the data comes out, as it is currently forecast to show a slide in business optimism and uninspiring levels of industrial orders.

Further ahead, the US dollar could rise higher against the pound if Federal Reserve officials back higher interest rates in their speeches this afternoon.



READ SOURCE

Leave a Reply

This website uses cookies. By continuing to use this site, you accept our use of cookies.