The GBP USD exchange rate has trended flatly today as the UK Supreme Court begins its hearing on whether the government can trigger Article 50 of the Lisbon Treaty.
Pound US Dollar (GBP USD) Pressured by Supreme Court Hearing
The Pound US Dollar (GBP USD) exchange rate has struggled to advance today as the UK government begins its appeal to the Supreme Court to decide whether government has the authority to start ‘Brexit’ without Parliament’s input.
The government is seeking to overturn an earlier judgement from the High Court that ruled that parliament must vote on Article 50 before it can be triggered, helping to allay fears that the government could purse a ‘hard Brexit’ unopposed.
While investors do not expect parliament to block ‘Brexit’, they hope that it may be opposed until the government outlines its plans for ‘Brexit’ and suitable amendments are made.
Consequently, should the Supreme Court rule in the government’s favour, Sterling is likely to plummet as traders’ fear it could lead to the UK losing access to the single market.
US Dollar Bolstered by Jump in ISM Non-Manufacturing PMI
The US Dollar was strengthened today by some impressive ISM Non-Manufacturing PMI data, with the report showing a surge from 54.8 to 57.2 in November, outpacing expectations that it would only see a modest increase to 55.5.
While the figure hit a new 12-month high, the ‘Greenback’ is unlikely to make any major gains from the rise as most traders have already maxed out on USD in advance of next week’s forecast Federal Reserve rate hike.
GBP USD Exchange Rate Forecast: US Factory Orders Data Could Boost the US Dollar
The GBP USD exchange rate may slide tomorrow with the release of the latest US Factory Orders report, with the figure predicted to surge from 0.3% to 1.9% in October.
Meanwhile a lack of UK data in the first half the week is likely to hinder the Pound as it struggles under the pressure from the Supreme Court hearing.
Looking longer-term the US Dollar is likely to remain relatively stable ahead of next week’s Federal Reserve rate meeting, in which investors predict that the Fed will vote to raise interest rates in December. The odds of a hike are currently hovering around 92%, making it a near certainty.
Current Interbank Exchange Rates
At the time of writing the GBP/USD exchange rate was trending around 1.27 and the USD/GBP exchange rate was trending around 0.78.
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