Published On: Thu, Sep 5th, 2019

Pound US Dollar exchange rate: Brexit optimism buoys GBP/USD as Jo Johnson Resigns | City & Business | Finance


Sterling clung onto Wednesday’s gains, rebounding from a three year low, with MPs voting in favour of the Hilary Benn bill. This will be sent to the House of Lords for approval on Friday and requires the Prime Minister to request an EU extension on the Brexit deadline unless a deal is agreed upon by 19 October. In other news today, safe-haven currencies like the US dollar have taken a hit as China’s Commerce Ministry confirmed face-to-face US-China trade talks next month, increasing risk appetite. 

The US services sector has seen its slowest increase in new business since March 2016 and business confidence has also hit a fresh low, feeding into fears for an imminent US recession.

Commenting on the data, Chris Williamson, Chief Business Economist said: “US business reported one of the toughest months since the global financial crisis in August, with growth of output, order books and hiring all slowing amid steep falls in both export and business confidence.”

Looking ahead, Brexit should remain the driving force for Sterling movement at the top of the week as the anti-no-deal Brexit bill moves through the House of Lords and the Prime Minister continues his campaign for a general election. 

The US dollar could experience sustained pressure if Friday’s nonfarm payrolls and US earnings data falls short of expectations.



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