The Pound to US Dollar (GBP/USD) exchange rate remains trading close to a one-year low as pressure to secure a favourable Brexit deal grows.
The latest warning against the UK crashing out of the EU without a deal has come from Scotland’s First Minister Nicola Sturgeon, who spoke in Edinburgh yesterday.
Mrs Sturgeon echoed the recent concerns of Bank of England (BoE) Governor Mark Carney, saying:
‘With every day that passes, the prospect of a no deal Brexit or a Brexit with very, very little information about the future relationship seems to become more and more likely.
‘Both of those outcomes would be completely unacceptable [and] absolutely disastrous for our economy.’
US Dollar to Pound Sterling (USD/GBP) Exchange Rate Rises on Higher Crude Oil Prices
Today’s US Dollar to Pound (USD/GBP) exchange rate gains have been triggered by the latest US crude oil stock data, which has shown a drop in US oil reserves.
News of falling oil supplies has benefitted US oil exporters, as prices have risen as a result of this resource shortage.
Oil supplies are already under pressure following US sanctions being imposed against Iran and this domestic stock reduction has further raised demand for remaining supplies.
Pound Sterling to US Dollar Exchange Rate Forecast: Can GBP/USD Recover on UK GDP Boost?
The Pound (GBP) might be able to recover from its recent losses against the US Dollar (USD) on Friday, when high-impact UK GDP data is due for release.
Initial estimates are expected to show a faster pace of quarterly and annual economic growth during Q2 2018, which could push the GBP/USD exchange rate higher.
Additional support could come from a UK 3-month GDP average reading, which is expected to shift from 0.2% growth to 0.4%.
Despite the potential for GBP/USD exchange rate gains on Friday morning, the US Dollar may prove to be the stronger currency when US inflation rate data comes on Friday afternoon.
The rate of price growth is tipped to rise for July’s monthly and annual base readings, which will put more pressure on the Federal Reserve to consider raising interest rates.
The US central bank has raised interest rates twice already this year and if the inflation stats exceed forecasts hopes could rise for another imminent interest rate hike.