- Sterling tumbles further following Article 50 timeline
- GBPUSD exchange rates hit fresh 30-year lows
- Further downfalls likely
- Non-Farm payrolls on Friday could further impact rates
Sterling to US Dollar exchange rates hit fresh Brexit lows
Following on from Theresa May’s comments over the weekend, Sterling continues its downward trend against a basket of currencies including the Euro and US Dollar. Whilst the UK economy continues to outperform expectations, fear amongst investors grows as the UK appears to follow a ‘hard’ Brexit stance.
A hard Brexit – a complete withdrawal from the single market would put the UK in even murkier water and only adds to the element of uncertainty for business and the economy. Theresa May has insisted that the UK voted to end open door immigration policies, a policy that cannot be implemented as a member of the single market. Guy Verhofstadt, the EU’s Brexit negotiator has insisted on many occasions that the UK cannot control borders and have access to the single market as it infringes on the EU’s 4 principles.
Further losses for Sterling are likely even in the absence of negative data, with little exit plan the UK remains a risky place for investment.
Non Farm Payrolls could be the most important yet
With Friday’s US Non Farm payrolls brings potential changes to the odds of a FED hike this year. Janet Yellen has recently stated that a ‘case for an interest rate hike has improved’ and this Friday could be make or break for the central bank.
Whilst it remains unlikely a hike will happen this side of the US elections, investors continue to eye up the potential for December.
Positive Non Farm Payrolls could have further implications for GBPUSD. Current trends appear to place GBPUSD exchange rates near 1.25 by the end of the trading week. US Dollar sellers should consider acting upon these levels as the US elections could cause quite a stir for the currency pair.
