GBP/USD has held onto many of its gains following Prime Minister Theresa May’s announcement that MPs would have a vote on extending Article 50 or ruling out a no-deal. Today, meanwhile, will see a House of Commons vote on a motion, along with amendments chosen by the Speaker, which effectively supports Mrs May’s statement yesterday. With expectations running in its favour, the motion it is expected to pass. This could see the pound continue to rise. The US dollar weakened this morning following generally mixed comments from the Chairman of the Federal Reserve, Jerome Powell, in which he commented upon the negative effects of the recent US government shutdown.
Mr Powell said: “Going forward, our policy decisions will continue to be data dependent and will take into account new information as economic conditions and the outlook evolve … We’re in no rush to make a judgment about changes in policy.”
US dollar investors will also be following Powell’s second round of testimony today, with any potentially bullish comments likely to benefit the USD/GBP exchange rate.
The on-going domestic political tensions in the US are once again weighing on the US dollar, with the House of Representatives voting to revoke President Donald Trump’s declaration of a national emergency for the building of the US-Mexico border wall.
House Speaker Nancy Pelosi highlighted the continuing divide between Congress and the White House, saying: “This isn’t about the border. This is about the constitution of the United States. This is not about politics. It’s not about partisanship. It’s about patriotism.”
USD traders will be awaiting the publication of the US nondefense capital goods orders figures today, with any increase likely providing some uplift for the ‘greenback’.
The pound, meanwhile, will likely remain steady after yesterday’s Brexit breakthrough and with any further news of MPs either supporting Mrs May’s withdrawal deal, or in favour of voting for an extension, the GBP/USD exchange rate could rise further.