Pound to US Dollar Exchange Rate News: GBP/USD Rises Following US Stock Market Volatility

GBP/USD Exchange Rate Dips a Day after Dow Jones Industrial Average Skyrockets

The Pound US Dollar (GBP/USD) exchange rate is down today, and is trading within the region of $1.2632 after the Dow Jones Industrial Average skyrocketed to 1,086 yesterday – its biggest single-day point gain in history – strengthening the US Dollar (USD).

The Pound (GBP), meanwhile, was weakened on the news that British Prime Minister Theresa May has cut her Cabinet ministers’ Christmas holiday short by five days to plan for a possible no-deal Brexit scenario.

The slowing down of Brexit news ahead of the New Year has benefited the Pound (GBP), with the House of Commons set to reconvene on 7 January to continue discussions over Theresa May’s UK-EU withdrawal deal.

Pound US Dollar (GBP/USD) Exchange Rate Down as Brexit ‘No-Deal’ Fears Linger

The Pound has remained increasingly sensitive to concerns over a possible ‘no-deal’ Brexit, with fears that Theresa May’s Brexit deal facing rejection in the New Year leaving traders feeling skittish towards ‘Sterling’.

Tomorrow, meanwhile, will see the release of the UK mortgage approval figures for November, with any signs of bullishness potentially providing a little leg-up for the Pound.

Meanwhile, Britain’s top police officer, Met Commissioner Cressida Dick, stated today that a Brexit ‘no-deal’ could put the country at risk, with ‘legal instruments’ under threat, stating:

‘We will have to replace some of the things we currently use in terms of access to databases, the way in which we can quickly arrest and extradite people, these kinds of things, we’ll have to replace as effectively as we can.’

USD/GBP Exchange Rate Rises as US Jobless Claims Fall

The US Dollar benefited from today’s publication of the continuing jobless claims figures for December, which showed a decrease.

These were followed by the release of the US initial jobless claims figures which also showed a decrease at 216K against last month’s 217K, further bolstering the ‘Greenback’.

Today also saw the release of the US housing price index for October which showed a bullish increase at 0.3% against last month’s 0.2%.

Later on today will see the release of the CB US consumer confidence figures for December, with any sign of an increase further likely to support the US Dollar.

Tomorrow, meanwhile, will see a slew of US housing ecostats with USD investors paying close attention to the new homes sales figures for November, which are expected to increase.

GBP/USD Outlook: Brexit and the Global Economic Situation Remain in Focus

The GBP/USD exchange rate is likely to be driven by political rather than economic forces in the New Year with Brexit debates expected to heat up again, potentially throwing the Sterling into a state of volatility if Theresa May’s Brexit deal looks like it might be rejected by Parliament.

‘Greenback’ investors, meanwhile, will be paying close attention to the US and the global economy, with increasing concerns focusing on US-China trade relations which have shown signs of flaring up again more recently.

Looking ahead into the New Year, the UK will see the release of its Markit manufacturing PMI figures for December which are expected to decrease, potentially denting the Sterling.

Friday, meanwhile, will see the publication of the UK Markit services PMI figures for December, with any signs of bullishness potentially bolstering the Pound.

The ‘Greenback’, meanwhile, could be affected by Thursday’s release of the ISM manufacturing PMI for December.

Friday will also see a range of important US employment ecostats, with USD investors paying close attention to the release of the nonfarm payroll figures for December, with any signs of bullishness potentially weakening the GBP/USD exchange rate.

John Cameron

John studied economics at Cambridge University and later became an MSTA qualified Technical Analyst. He began working for TorFX almost a decade ago and now holds a Senior Account Manager position. As well as lending his clients support and guidance, John has produced market commentary and detailed exchange rate analysis for a number of online publications.

Contact John Cameron