GBP/USD Falls over New Brexit Uncertainty

The Pound has weakened lower today against the US Dollar after weekend reports have hinted that the Chequers plan on Brexit could be facing some troubles ahead. The Pound has fallen against most of the major currencies including the Dollar as the markets now expect more political wrangling and a lack of final agreement on Brexit between Britain and the EU. Parliament in the UK resumes tomorrow after the summer recess comes to and end and politics will once again become the main driver for the price of Sterling.

This is the principle reason for the fall in Sterling but it is also a case of Dollar strength which is creating movement with the US Dollar continuing to perform amidst the ongoing trade wars which are impacting the global economy. For now the battle between China and the US continues with no sign of easing on the world stage.

The NAFTA agreement between the US, Mexico and Canada is also nearly completed although the latest twist is that Canada could be exempt from a final deal which could have consequences for both the Canadian and US Dollars. However, the Dollar remains extremely buoyant for the moment, with rates for GBP/USD sitting below 1.28 for the pair creating an excellent opportunity for those needing to sell Dollars for Pounds.

It will be interesting to see the market reaction tomorrow when the US markets re-open after today’s national holiday, Labour Day. Manufacturing data and factory orders are likely to be monitored closely to see how well the sector is performing especially in the context of the trade wars taking place. US Non Farm Payrolls are released on Friday and should also make for an interesting end to the week. Brexit meanwhile is the one to watch for selling or buying Dollars.

For more information on the ways your currency exchage could be impacted by political factors in the UK and US, please don’t hesitate to get in touch with me, James at [email protected].

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