{"id":3422,"date":"2019-08-08T06:43:29","date_gmt":"2019-08-08T10:43:29","guid":{"rendered":"https:\/\/currencylive.com\/?p=3422"},"modified":"2019-08-09T15:02:17","modified_gmt":"2019-08-09T19:02:17","slug":"101077-pound-edges-ahead-us-freetrade-optimism","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101077-pound-edges-ahead-us-freetrade-optimism\/","title":{"rendered":"GBP\/USD: Pound Edges Ahead On US Freetrade Deal Optimism"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Brexit nerves weighed on demand for the pound in the previous session, whilst the dollar was in demand thanks to its safe haven properties. As a result, the pound fell lower versus the US dollar on Wednesday, closing 0.2% in the red at US$1.2141. The pair is gaining ground in early trade on Thursday.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>What do these figures mean?<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">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.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, it could be written:<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">1 GBP = 1.28934 USD<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">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.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Or, if you were looking at it the other way around:<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">1 USD = 0.77786 GBP<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">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.<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">UK politics continue to be the driving force behind the pound. On Wednesday the UK domestic political situation took a turn for the worse as the threat of a second Scottish independence vote increased. The shadow Chancellor, Labour\u2019s John McDonnell said on Wednesday that Labour would not stand in the way of a second Scottish independence referendum. The reason behind Labour\u2019s change of policy is clear. A Scottish National Party \u2014 Labour Party coalition could keep the Conservatives out of power if Boris Johnson calls an early election. Currently polls indicate that Scotland would vote Leave in a new referendum.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Whilst an election could mean a hard Brexit is avoided, it could also mean that a second Scottish independence referendum is on its way. This knocked the pound.<\/span><\/p>\n<table>\n<tbody>\n<tr>\n<td><b>How does political risk impact on a currency?<\/b><\/td>\n<\/tr>\n<tr>\n<td><span style=\"font-weight: 400;\">Political risk drags on the confidence of consumers and businesses alike, which means\u00a0 both corporations and regular households are then less inclined to spend money. The drop in spending, in turn, slows the economy. Foreign investors prefer to invest their money in politically stable countries as well as those with strong economies. Signs that a country is politically or economically less stable will result in foreign investors pulling their money out of the country. This means selling out of the local currency, which then increases its supply and, in turn, devalues the money.\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">Today sterling is seen gaining ground as investors continue to focus on Brexit developments. The pound has found some solace in news that US Secretary of State Mike Pompeo told his UK counterpart Dominic Raab that the US stands ready to sign a free trade agreement at the earliest possible time. This would at least soften the blow of the UK losing access to the single market.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Flight To Safety Keeps Dollar Buoyant<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The dollar has been benefiting this week from a flight to safety stance in the financial markets amid the ongoing concerns over the US-Sino trade dispute. The dollar is the global reserve currency, this means that in times of increased geopolitical tensions investors tend to move into the dollar. With China hinting towards a currency war the dollar has been in favour.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">President Trump reiterating accusations that the Federal Reserve is not cutting rates fast enough has dented demand for the dollar lower in early trade on Thursday. Trump\u2019s tweet that the \u201cFed needs to cut bigger and faster\u201d and that the problem was not China but the US central bank has unnerved dollar investors.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Today the US economic data docket is relatively light with just initial jobless claims to focus on.<\/span><\/p>\n<hr \/>\n<p><small><em>This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice 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 or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.<br \/>\nThe content at CurrencyLive.com is the sole opinion of the authors and in no way reflect views of TransferWise Ltd.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Brexit nerves weighed on demand for the pound in the previous session, whilst the dollar was in demand thanks to its safe haven properties. As a result, the pound fell lower versus the US dollar on Wednesday, closing 0.2% in the red at US$1.2141. The pair is gaining ground in early trade on Thursday. What [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3428,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379],"tags":[1386,1399,1408,1407,1394,1406,1391,1392,1400,1397,1398],"class_list":{"0":"post-3422","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"tag-brexit","9":"tag-china","10":"tag-fed","11":"tag-free-trade-deal","12":"tag-gbp","13":"tag-no-deal","14":"tag-pound","15":"tag-sterling","16":"tag-trump","17":"tag-us-dollar","18":"tag-usd"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GBP\/USD: Pound Edges Ahead On US Freetrade Deal Optimism - 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\/101077-pound-edges-ahead-us-freetrade-optimism\/\" \/>\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\\\/101077-pound-edges-ahead-us-freetrade-optimism\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101077-pound-edges-ahead-us-freetrade-optimism\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Edges Ahead On US Freetrade Deal Optimism\",\"datePublished\":\"2019-08-08T10:43:29+00:00\",\"dateModified\":\"2019-08-09T19:02:17+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101077-pound-edges-ahead-us-freetrade-optimism\\\/\"},\"wordCount\":753,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101077-pound-edges-ahead-us-freetrade-optimism\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/gbp-usd-currency-session.jpg\",\"keywords\":[\"Brexit\",\"china\",\"fed\",\"free trade deal\",\"gbp\",\"no deal\",\"pound\",\"sterling\",\"trump\",\"us dollar\",\"usd\"],\"articleSection\":[\"GBP\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101077-pound-edges-ahead-us-freetrade-optimism\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101077-pound-edges-ahead-us-freetrade-optimism\\\/\",\"name\":\"GBP\\\/USD: Pound Edges Ahead On US Freetrade Deal Optimism - 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