Pound US Dollar (GBP/USD) Exchange Rate Rises despite US Economic Growth Forecast Upgraded
UPDATE: The Pound Sterling US Dollar (GBP/USD) exchange rate rose and the pairing is currently trading at an inter-bank rate of $1.2694.
The Organisation for Economic Cooperation and Development (OECD) slashed global economic growth forecasts.
The global economy is now expected to grow by 3.2% in 2019.
The Organisation also revealed that if trade tensions continue, growth in the US and China could be around 0.2-0.3% lower by 2021 and 2022.
This likely dampened sentiment in the US Dollar on Tuesday.
However, without taking trade tensions into account, it is estimated that the US will outpace other large developed economies.
US growth forecasts have been upgraded from March’s prediction of 2.6% growth to 2.8%.
Pound US Dollar (GBP/USD) Exchange Rate Flat as Chicago Fed Index Falls Close to Three-Year Low
UPDATE: The Pound Sterling US Dollar (GBP/USD) exchange rate remained flat and the pairing is currently trading at an inter-bank rate of $1.2740.
On Monday afternoon the Chicago Fed National Activity Index slipped to a further-than-forecast -0.45.
This is the lowest the index has fallen to since August 2016, close to a three year low.
Data showed that factories were a significant economic drag on activity in April, which likely dampened sentiment in the ‘Greenback’.
Pound US Dollar (GBP/USD) Exchange Rate Muted as Former Brexit Secretary Voting Against New Deal
UPDATE: The Pound Sterling US Dollar (GBP/USD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of $1.2737.
Brexit pessimism likely weighed on Sterling as former Brexit Secretary David Davis revealed he would be voting against the Prime Minister’s ‘new and improved’ Brexit deal.
Commenting on the Withdrawal Agreement, Davis said:
‘This is not a great new offer; it’s a great new concession. What it will do, and this is the critical thing, is, if we pass that act, it opens things up so that the successor to the Prime Minister […] will have their hands tied. And I think the next Prime Minister must have the right to reset the negotiations on their terms.’
Pound US Dollar (GBP/USD) Exchange Rate Rises as PM Says She will Present ‘New and Improved’ Brexit Deal
The Pound Sterling US Dollar (GBP/USD) exchange rate has risen almost 0.3% today and the pairing is currently trading at an inter-bank rate of $1.2753.
UK Prime Minister Theresa May is said to have a ‘new and improved’ Brexit deal which she will put forward to MPs in early June.
Writing in the Sunday Times, the Prime Minister stated that the bill will be a ‘bold offer’.
However, Labour leader Jeremy Corbyn said Labour MPs would oppose the bill, indicating that he believes it would be ‘very difficult’ to see it make progress.
This comes just days after reports revealed that the Brexit cross-party talks had broken up without a deal being made.
After six weeks, discussions ended without a resolution to the Brexit deadlock.
Pound US Dollar (GBP/USD) Exchange Rate Makes Gains as Google Restricts Huawei use of Android
On Sunday, it was revealed that US internet giant Google had suspended some business with Chinese telecoms firm, Huawei.
This comes just days after US President Donald Trump announced that Huawei would be added to the US government’s ‘Entity List’ of untrusted firms.
This banned the tech giant from acquiring technology from US firms without governmental approval.
Google stated it was ‘complying with the order and reviewing the implications.’
This could mean that Huawei devices may not be able to access apps including YouTube and Google Maps – a move that has heightened trade tensions as the suspension could damage the company’s business outside China.
Commenting on the effect on business, Ben Wood from the CCS Insight Consultancy said this move would have ‘big implications for Huawei’s consumer business.’
Pound US Dollar Outlook: Will a Disappointing UK Inflation Report Weigh on GBP?
Looking ahead to this afternoon, the US Dollar (USD) could slide further against the Pound (GBP) following the release of the Chicago Fed National Activity Index.
If April’s index slides further than forecast it could dampen sentiment in the ‘Greenback’.
Meanwhile, on Tuesday the release of the UK inflation report hearings could weigh on Sterling.
If the report hearings reveal that inflation is expected to fall below the Bank of England’s target, the Pound US Dollar (GBP/USD) exchange rate could slide.