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Pound US dollar exchange rate passes $1.31 as Democrats deliver blow to Trump in US midterms

currency-newsPound US dollar exchange rate passes $1.31 as Democrats deliver blow to Trump in US midterms
The pound punched higher in trade on Wednesday, making particularly strong gains against the US dollar as the US midterm elections got underway.

Trade in Sterling appears more mixed this morning however, with GBP/EUR flat at €1.1461, GBP/AUD muted at AU$1.8104 and GBP/NZD steady at NZ$1.9438. While at the same time GBP/USD and GBP/CAD are both trending higher this morning as they strike $1.3149 and C$1.7241 respectively.

Looking ahead, only data release of note today looks set to be the Eurozone’s retail sales figures, with a third consecutive contraction likely to drag on EUR exchange rates.

What’s been happening?                                                      
Brexit remained in the spotlight for GBP investors yesterday, with the pound briefly pushing to new highs as investors reacted to mention of a hand gesture.

Odd as it sounds, the main factor buoying Sterling yesterday was a supposed ‘thumbs up’ uttered by Brexit secretary Dominic Raab to reporters as he left a Brexit cabinet meeting at Downing Street.

While this wasn’t enough to prompt a major rally in GBP it still proved enough to propel the pound to new highs against its peers.

Sterling’s most notable movement was seen against the US dollar, with the GBP/USD exchange rate climbing almost a cent throughout Tuesday’s session and overnight as the US midterm elections saw the Democrats gain control of the House of Representatives, striking a blow to Donald Trump’s fiscal plans.

Meanwhile movement in the GBP/EUR exchange rate was more subdued on Tuesday, but still saw the pairing strike a new four-month low as the Eurozone’s private sector was confirmed to have slowed to a two-year low in October. 

What’s coming up?
The euro could find itself in focus this morning as the publication of the Eurozone’s latest retail sales figures may soften the single currency if sales continued to contract in September as some analysts suspect.

Meanwhile in the absence of any notable UK data, Brexit is likely to continue to dictate movement in the Pound on Wednesday, likely leading to further gains if headlines remain positive. 

Finally a similar lull in US data is set to see the US dollar also remain driven by political considerations today, with the fallout from the midterms likely to set the tone.
 
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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