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You are here: Home / US Dollar / Pound to US Dollar exchange rates edge closer to two month high

Pound to US Dollar exchange rates edge closer to two month high

February 1, 2017 by Rob Lloyd

Pound to US Dollar exchange rates edge closer to two month high

Following this morning’s strong Manufacturing PMI, the Pound has continued to post gains against the Euro and US Dollar as MP’s debate the Brexit bill at the House of Commons. It’s widely anticipated that Parliament will vote in favour of the Brexit bill, which gives Theresa May the go ahead with triggering Article 50 of the Lisbon Treaty.

Despite the uncertainty that lies ahead, markets remain somewhat bullish towards the Pound, due in most part to the stream of positive economic data that continues to defy the Brexit predictions from last year.

Furthermore, the Bank of England’s Mark Carney is expected to review growth forecasts in tomorrow’s briefing, as the combination of higher inflation and strong consumer spending supports GDP. There is now a strong argument for the Bank of England to look at raising interest rates if inflation soars above its 2% target.

Trump controversy raises concerns

The US Dollar continues to post losses against a basket of currencies as markets fear the newly appointed President’s orders. His decision to ban nationals from 7 countries from entering the US has been met with widespread criticism, sending a clear signal that the US plans to further protect its interests.

In a world of global trade, this could spell bad news for the US economy. Donald Tusk, the EU’s President has labelled a Trump presidency ‘the biggest risk to the EU’.

However this hardcore protectionist stance may cause a domino affect in which other nations back away from trading with the US, a move that could lead to yet another global economic crisis.

It would seem that the President is planning to fulfil his campaign promises, the wall around Mexico is just the tip of the iceberg from what is perhaps, the nations most outlandish President in history.

With Article 50 now anticipated for early March, the Pound may begin to lose its momentum in the weeks ahead, even in the company of a highly unpredictable Trump.

Filed Under: US Dollar

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About Rob Lloyd

Robert brings with him a wealth of knowledge on what is impacting exchange rates, especially around the subject of the EU Referendum and the implications for Sterling and Euro exchange rates.

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