The Pound US Dollar exchange rate has weakened today, primarily on account of the latest UK domestic data proving highly mixed.
The US Dollar’s latest gains have come from enhanced Fed rate hike bets, although ongoing divisions among the Trump administration have limited positive USD movement.
Pound Weakens after Google Investment, US Dollar Advances on High Interest Rate Hike Bets
The latest Pound US Dollar movement has been negative, with the GBP USD rate coming in at 1.24.
UK news of note has actually been positive recently, with the September unemployment rate falling and average earning excluding bonuses rising in the same month. Adding to the overall levels of UK economic optimism has been the news that Google is planning to make a £1bn investment in London, creating around 3000 jobs.
The USD has been continually boosted by high Fed interest rate hike bets (with odds of a hike in the area of 90%), though disruption has come from the latest Trump administration controversy.
This has focused on the appointment of Steve Bannon as Chief Strategist; Bannon previously worked in a top position on the Breitbart website, a notoriously right-wing outlet. This has raised serious concerns among critics and other Trump team officials, who have questioned what kind of US agenda Bannon may seek to impose.
Pound Sterling Gains Expected if Government is Blocked from Early Article 50 Trigger
The next source of significant gains for the Pound US Dollar exchange rate could well be the Government itself, depending on how the latest challenge from the Supreme Court is processed.
While the Court will be hearing the Government’s appeal on Article 50 at the start of December, one of its judges, Lady Hale, has potentially identified a more long-term hurdle..
Hale has raised the issue that before triggering Article 50, the 1972 act that brought the UK into the then-tripartite EU may have to be replaced; this has been estimated to take years.
Should this lengthy detour be a legal requirement, the Pound may well rally, as it will effectively cement a continued stable position in the EU for an extended time.
US Dollar’s Value Hangs in the Balance ahead of Trump’s January Inauguration
One of the next big events in the US that could move the USD will come early next year, when President-Elect Donald Trump takes power and begins implementing his policies.
While the US Dollar has actually been surprisingly stable since Trump’s election victory, it remains to be seen just how much of a compromise will be made on some of his more radical promises.
In particular, if the intention to deport millions of illegal migrants on ‘day one’ is followed through, the US Dollar may plunge against the Pound, owing to the logistical nightmare that this course of action is expected to entail.
Recent Interbank Exchange Rates
At the time of writing, the Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.24 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.80.
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