{"id":11486,"date":"2019-10-14T04:58:41","date_gmt":"2019-10-14T08:58:41","guid":{"rendered":"https:\/\/currencylive.com\/?p=11486"},"modified":"2019-10-14T04:58:41","modified_gmt":"2019-10-14T08:58:41","slug":"101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\/","title":{"rendered":"GBP\/USD: Pound Back Below US$1.26 On Brexit & Trade Disappointment"},"content":{"rendered":"

The pound surged 2.5% and to a three-month high versus the dollar in the previous week. Brexit optimism sent the pound US dollar exchange rate to a peak of US$1.2707 on Friday before the pair eased slightly into the close. The pound is back below US$1.26 in early trade on Monday as Brexit optimism fades.<\/p>\n

The pound rallied hard across Thursday and Friday on renewed hopes of a Brexit deal. Following a meeting between UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar, Brexit talks hit a turning point. The tow leaders agreed that they saw a pathway to a deal. Reports following talks between EU Chief negotiator Michel Barnier and UK Brexit Secretary Steve Barclay on Friday were also positive. However, the pound has dropped lower at the start of the week as the EU cast doubts on Johnson’s deal.<\/p>\n

Market analysts are expecting the pound to experience high levels of volatility this week given the Brexit timeline of events. Boris Johnson will attend the EU summit on 16th<\/sup> \u2014 17th<\/sup> in an attempt to secure a deal with EU leaders before the UK is due to leave the EU on 31st<\/sup> October.<\/p>\n

Intense Brexit talks are set to continue, and the pound will be directed by the headlines surfacing from these talks. Failure to secure a deal would mean that Boris Johnson would be forced to request the EU for an extension to Brexit. However, doubts exist as to whether he would do this given his \u201cdo or die\u201d Brexit rhetoric.<\/p>\n

 <\/p>\n\n\n\n\n
Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit?<\/strong><\/td>\n<\/tr>\n
A soft Brexit implies anything less than UK\u2019s complete withdrawal from the EU. For example, it could mean the UK retains some form of membership to the European Union single market in exchange for some free movement of people, i.e. immigration. This is considered more positive than a \u201chard\u201d Brexit, which is a full severance from the EU. The reason \u201csoft\u201d is considered more pound-friendly is because the economic impact would be lower. If there is less negative impact on the economy, foreign investors will continue to invest in the UK. As investment requires local currency, this increased demand for the pound then boosts its value.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Today the Queen will officially open the new session for Parliament. Boris Johnson\u2019s policies will come under close scrutiny, ensuring that politics remain firmly in focus for pound investors.<\/p>\n

Dollar Advances As Trade Concerns Return<\/strong><\/h3>\n

The dollar moved lower versus its peers across the previous week as investors remained optimistic that the US and China would be able to achieve a deal. The 13th<\/sup> round of trade talks in Washington at the end of last week proved to be a success and a limited trade deal has been agreed between the two powers. The US will hold off from increasing tariffs on Chinese goods, in exchange for some Chinese concession, mainly related to agriculture. As geopolitical tensions eased, demand for the safe haven dollar declined.<\/p>\n

Today the dollar is back in favour. Investors are scrutinising the much-hyped trade agreement and are now seeing it as a month-long standstill agreement rather than anything more. Adding to \u00a0the negativity, the effects of the trade dispute on China\u2019s economy were evident with weaker than forecast Chinese trade data. Weakness in the world’s second largest economy is unnerving investors.<\/p>\n

The US economic is quiet until Wednesday meaning dollar investors\u2019 attention will remain on trade and geopolitics.<\/p>\n

 <\/p>\n\n\n\n\n
What do these figures mean?<\/strong><\/td>\n<\/tr>\n
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.<\/p>\n

For example, it could be written:<\/p>\n

1 GBP = 1.28934 USD<\/em><\/p>\n

Here, \u00a31 is equivalent to approximately $1.29. This specifically measures the pound\u2019s worth against the dollar. If the US dollar amount increases in this pairing, it\u2019s positive for the pound.<\/p>\n

Or, if you were looking at it the other way around:<\/p>\n

1 USD = 0.77786 GBP<\/em><\/p>\n

In this example, $1 is equivalent to approximately \u00a30.78. This measures the US dollar\u2019s worth versus the British pound. If the sterling number gets larger, it\u2019s good news for the dollar.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

This publication is provided as general information only and is not intended as an exhaustive treatment of its subject. TransferWise Inc. and its affiliates (“we” or “us”) expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of this publication, and 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 in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from us.\u00a0 We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

The pound surged 2.5% and to a three-month high versus the dollar in the previous week. Brexit optimism sent the pound US dollar exchange rate to a peak of US$1.2707 on Friday before the pair eased slightly into the close. The pound is back below US$1.26 in early trade on Monday as Brexit optimism fades. […]<\/p>\n","protected":false},"author":163946597,"featured_media":5575,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1396,1386,1399,1394,1406,1391,1628,1627,1462,1400,1397,1398],"class_list":["post-11486","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gbp","category-usd","tag-boris-johnson","tag-brexit","tag-china","tag-gbp","tag-no-deal","tag-pound","tag-queen-speech","tag-sterllig","tag-trade","tag-trump","tag-us-dollar","tag-usd"],"acf":[],"yoast_head":"\nGBP\/USD: Pound Back Below US$1.26 On Brexit & Trade Disappointment - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Back Below US$1.26 On Brexit & Trade Disappointment\",\"datePublished\":\"2019-10-14T08:58:41+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\\\/\"},\"wordCount\":842,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100627-gbp-usd-fed-rate-decision.jpg\",\"keywords\":[\"boris johnson\",\"Brexit\",\"china\",\"gbp\",\"no deal\",\"pound\",\"queen speech\",\"sterllig\",\"trade\",\"trump\",\"us dollar\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101242-gbp-usd-pound-back-below-us1-26-on-brexit-trade-disappointment\\\/\",\"name\":\"GBP\\\/USD: Pound Back Below US$1.26 On Brexit & Trade Disappointment - 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