The GBP USD exchange slipped from its best levels this morning as another UK company warned of potential price rises following the fall of the Pound.
Pound US Dollar (GBP USD) Slides as Weetabix Warns of Price Hike
The Pound US Dollar (GBP USD) exchange rate dipped this morning as Weetabix became the latest company to announce that it would raising prices in the UK after Brexit caused the value of Sterling to plummet last year.
This Echoed the Marmite furore late last year that threatened to see a number of Unilever products pulled from shelves in Tescos over a price dispute.
It also follows recent warnings from other companies such as Next and Easyjet that prices are likely to rise in 2017.
Markets are concerned that price hikes will negatively impact consumer spending in 2017, an aspect of the economy which had been a large contributing factor to the resilience in the UK economy since the EU referendum.
Trump’s Immigration Policy Weighs on US Dollar
The US Dollar struggled to capitalise on Sterling’s short comings this morning as investors grew increasingly concerned over the new US administration as Donald Trump signed an executive order barring immigration to the US from seven predominately Muslim countries.
Many US companies, especially those in the tech sector, have condemned the move, saying the 90 day ban is already hampering their ability to recruit talent from overseas.
While the number of employees affected by the ban is relatively small for most companies, many are worried that Trump’s criticism of the H-1B visa could expand his immigration policies to include countries like India which provides thousands of software engineers each year for companies like Google.
GBP USD Exchange Rate Forecast: US PCE Ahead
The GBP USD exchange rate may come under further pressure later today should the latest US PCE Price Index rise from 1.6% in December as expected.
However there is potential for the rise to be overshadowed by Trump later today as he begins his second week in office, with further protectionist rhetoric likely to weaken investor confidence in the US Dollar.
Meanwhile the Pound may be softened tomorrow by the release of the latest UK Consumer Confidence report as analysts predict that the accelerated inflation rate and uncertainty over Brexit will cause sentiment to waver in January.
Current Interbank Exchange Rates
At the time of writing the GBP USD exchange rate was trending around 1.25 and the USD GBP exchange rate was trending around 0.79.
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