GBP/EUR: Pound Tumbles As PM May Clings To Power

The pound fell for a third straight session versus the US dollar on Thursday. The pound US dollar exchange rate gave up a further 0.4%, taking losses for the week to -2.2%. The pound closed the session at US$1.3017. The pair is consolidating losses in early trade on Friday.

The pound touched the session high shortly after the Bank of England monetary policy announcement, before paring those gains and more. As was widely anticipated the BoE kept monetary policy unchanged with interest rates at 0.75%. The bond buying programme was also kept on hold at $435 billion per month. As in November, two policy makers of the 9, voted in favour of a rate cut. However, the central bank also noted that global growth had shown tentative signs of recovery and policy makers on the whole had a more hawkish tilt. The pound jumped following the announcement.

The pound was unable to hold onto the gains as investors switch their attention back to Brexit and renewed no deal Brexit fears. Concerns over a disorderly Brexit resurfaced following Prime Minister announcing that he would seek legislation to make extending the transition period illegal. No deal Brexit fear look set to dominate 2020 as they did 2019.

Today Boris Johnson is expected to put his Withdrawal Bill back to the House of Commons, and he is expected to win with a comfortable margin. Investors could also shift their gaze briefly towards the final reading of the third quarter GDP. Analysts are forecasting economic growth was 1%, in line with the second revision. Any signs of weakness could weigh on the pound.

US GDP In Focus

Dollar was broadly flat versus its peers in the previous session, albeit stronger versus the pound, as investors weighed up the latest trade headlines and Trump’s impeachment trial. The dollar traded quietly as investors looked ahead to today’s GDP reading. Analysts are expected third quarter GDP to print at 2.1%. A stronger reading could lift the greenback.

The dollar has benefited this week from stronger than forecast economic data, decreasing fears that the Fed will continue its interest rate cutting cycle next year.


What do these figures mean?
When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.

For example, it could be written:

1 GBP = 1.28934 USD

Here, £1 is equivalent to approximately $1.29. This specifically measures the pound’s worth against the dollar. If the US dollar amount increases in this pairing, it’s positive for the pound.

Or, if you were looking at it the other way around:

1 USD = 0.77786 GBP

In this example, $1 is equivalent to approximately £0.78. This measures the US dollar’s worth versus the British pound. If the sterling number gets larger, it’s good news for the dollar. is a news site only and not a currency trading platform. is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation. We do not guarantee that the website will operate in an uninterrupted or error-free manner or is free of viruses or other harmful components. The content on our site is provided for general information only and is not intended as an exhaustive treatment of its subject. We expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of our site, any you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content on our site. Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on do not represent our views.