The Pound US Dollar (GBP USD) exchange rate has started the session on strong footing this week, as markets await a key rate decision by the Bank of England (BoE) later this week.
Pound (GBP) Weakened as Brexit Concerns Grow
Sterling climbed around half a cent higher against the US Dollar this morning as investors brace for the possibility that the BoE’s Monetary Policy Committee will vote to raise interest rates when they meet on Thursday.
There has been considerable speculation over the past couple of months whether policymakers will deliver a rate hike at their November meeting, after hawkish comments by Governor Mark Carney were undermined by weak economic data over the past couple of weeks.
However despite these doubts most economists remain confident that the BoE will vote later this week for its first rate hike in over a decade.
The question will now turn to whether a rate hike this month will be a one off or whether the it will signal the start of a new cycle of monetary tightening, with markets likely to be disappointed if there is any hint that it may be the former.
US Dollar (USD) Slips as EX-Trump Aide Faces Russia Charges
The US Dollar has slipped in early trading this week as an ex-Trump aides faces charges in the FBI’s ongoing investigation into alleged Russian interference in the US election.
US media reported today that the former manager of Donald Trump’s presidential campaign, Paul Manafort was seen arriving at an FBI office in Washington this morning.
While Trump has repeated rejected allegations of collusion with Russia, branding the investigation a ‘witch hunt’ investors fear that the latest development could further erode his political capital in Washington, possibly frustrating his attempts to pass tax reforms.
GBP USD Forecast: US Personal Spending Figures to Jump?
Looking ahead the GBP USD exchange rate may cede some ground later this afternoon as the US releases its latest personal spending data, with economists forecasting that spending will have grown from 0.1% to 0.8% in September as the impact of Hurricanes Harvey and Irma subsided.
Meanwhile the Pound could also be pushed lower overnight on Monday as analysts predict that the UK latest consumer confidence data will reveal a drop in household sentiment in October.
Current Interbank Exchange Rates
At the time of writing the GBP USD exchange rate was trending around 1.3195 and the USD GBP exchange rate was trending around 0.7577.
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