Pound Sterling US Dollar Exchange Rate Live: GBP/USD Breaks $1.30 Barrier on Sustained Brexit Delay Hopes

GBP/USD Exchange Rate Surges on Brexit Hopes

UPDATE: The Pound Sterling to US Dollar (GBP/USD) exchange rate is trading above $1.30 for the first time in two-months this afternoon as Sterling continues to be boosted by Brexit optimism.

GBP investors have growth increasingly confident that the UK will avoid a no-deal Brexit in recent days, something that has been bolstered today by headlines indicating that the Labour party will back an amendment that seeks to delay Brexit

While the government continues to reject calls to extend Article 50, most analysts now agree that a delay appears inevitable.

GBP/USD Exchange Rate Buoyed by Strong Wage Figures, Brexit Optimism

The Pound Sterling to US Dollar (GBP/USD) exchange rate remains on a strong footing this morning, with the pairing rapidly approaching $1.30 after soaring higher yesterday on the back of some strong UK wage figures and rising Brexit optimism.

At the time of writing the GBP/USD exchange rate is edging higher this morning, with the pairing striking a new two-month high.

Pound (GBP) Exchange Rates to Extend Gains as Brexit Delay Speculation Grows?

The Pound (GBP) has enjoyed a strong start to 2019, making steady gains against the US Dollar (USD) and the majority of its other peers over the past few weeks following the latest developments in Brexit.

GBP investors now appear increasingly confident that this uptrend in Sterling may persist in the coming weeks as speculation grows that Brexit will be delayed.

Following the crushing defeat of her EU withdrawal deal in Parliament earlier this month, May is scrambling to form a ‘Plan B’ that is palatable for both the EU and UK MPs ahead of a debate on the new plan on 29 January.

However some analysts believe that MPs will use this opportunity to table a number of amendments to her new plan in order to wrest control of Brexit away from the government, something that could lead to a number of outcomes, but will almost definitely result in the UK needing to extend Article 50.

Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole SA suggests:

‘We have to wait and see whether the amendments pass the house on Jan. 29. Evidence that the House can now dictate the course of Brexit, for example a second referendum, could play out as a positive development for the currency.’

US Dollar (USD) Exchange Rates Steady as Markets Remain Risk-Off

While the US Dollar (USD) may be on the defensive against the Pound (GBP) this morning, in broader currency markets the ‘Greenback’ is showing resilience as investors remain risk adverse.

This drop in risk appetite appeared to be partly driven by a slide in commodity prices and ongoing global trade concerns, but was mostly attributed to a speech by Chinese President Xi Jinping that stoked fears of a slowdown in China’s economy.

The resulting jitters helped to drive modest gains in safe-haven assets throughout the first half of the week, helping to minimise the US Dollar’s losses against Sterling this morning.

GBP/USD Exchange Rate Forecast: Brexit to Continue to Drive Sterling Movement?

Looking ahead, a lull in impactful data is likely to leave Brexit as the main catalyst for movement in the Pound US Dollar (GBP/USD) exchange rate for the remainder of this week, potentially strengthening Sterling if sentiment remains positive.

Meanwhile, markets may begin to take a bearish stance towards the US Dollar in the coming days should the US government shutdown continue to drag on sentiment.

Luke Trevail

Luke studied Journalism at university but quickly moved into the financial sector, initially working in retail banking before joining TorFX in 2007. As a Senior Account Manager Luke assists in overseeing the management of the company’s exposure to currency volatility. He uses his years of foreign exchange experience to produce regular news updates exploring the latest currency movements.

Contact Luke Trevail