GBP/USD Exchange Rate Struggles in Run up to Debate
The Pound Sterling to US Dollar (GBP/USD) exchange rate drifted lower at the start of the European session on Thursday as markets brace for another parliamentary debate on Brexit later in the day.
At the time of writing the GBP/USD exchange rate has fallen around 0.2% so far today, propelling the pairing down to a new three-week low.
Pound US Dollar (GBP/USD) Exchange Rate Drifts Lower Ahead of Brexit Debate
The Pound (GBP) is stuck on the back foot against the US Dollar (USD) and the majority of its other peers this morning as markets remain wary of the UK currency ahead of the latest parliamentary debate on Brexit.
MPs are set to vote on the next steps in the Brexit process later today as Theresa May continues to push to get a withdrawal deal through Parliament.
The motion up for debate today is designed to affirm ‘the approach to leaving the EU’ as set out at the end of January.
While a number of amendments are expected to be tabled by MPs in an attempt to influence the direction of Brexit, the debate is expected to proceed without incident after May addressed the House of Commons on Tuesday asking for more time to pursue her ‘mandate’ to negotiate an ‘alternative’ to the Irish backstop.
However several Brexiteer backbenchers have threated to vote against the government as the wording of the motion means they would be backing a previous amendment that would prevent Brexit from taking place without a formal deal in place.
This understandably has a few GBP investors nervous this morning, as they fear another setback for Theresa May today could lead to further Brexit uncertainty.
GBP/USD Exchange Rate Outlook: US Retail Sales to Boost the Greenback?
Also coming up later in today’s session will be the release of latest US retail sales data, potentially placing further pressure on the Pound US Dollar (GBP/USD) exchange rate.
After being delayed due to the US government shutdown, December’s retail figures are forecast to show that the US bucked the global trend at the end of 2018, with sales growth expected to have continued to accelerate over Christmas.
Some analysts even predict that sales will have climbed as much a 0.4% in December, with a robust reading in consumer spending likely to boost hopes for solid US economic growth in the fourth quarter.
Meanwhile the tail end of the week will see the release of the UK’s own retail sales figures, with the Pound potentially finding some modest support if retail sales growth rebounded from -0.9% to 0.2% in January as forecast.