{"id":4016,"date":"2017-10-24T00:00:00","date_gmt":"2017-10-24T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100196-gbp-usd-brexit-hopes-soar\/"},"modified":"2017-10-24T00:00:00","modified_gmt":"2017-10-24T04:00:00","slug":"100196-gbp-usd-brexit-hopes-soar","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100196-gbp-usd-brexit-hopes-soar\/","title":{"rendered":"Pound vs Dollar Given a Late Boost by Hopes in Brexit Momentum"},"content":{"rendered":"<p>On Monday, the pound proved just how politically driven it is. Sterling gained versus the US dollar despite UK business optimism dropping to its lowest level in a year. After a slow start for the pound in the previous session, it reversed losses in the afternoon, moving higher versus the strong dollar. The pound US dollar exchange rate finished over 0.1% higher at US$1.3197 .<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> 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<p> For example, it could be written: <em>1 GBP = 1.28934 USD<\/em> <\/p>\n<p> <em>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.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.77786 GBP<\/em> <\/p>\n<p> <em>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.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>Data on Monday from the Confederation of Business Industry (CBI) showed UK business optimism dropped from -5 to -11 in the three months to October. This is the lowest level in over 12 months, undermining optimism in the outlook for the UK economy. Usually, poor data sends the pound lower.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does poor economic data drag on a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Slowing economic indicators point to a slowing economy. Weak economies have weaker currencies because institutions look to reduce investments in countries where growth prospects are low and then transfer money to countries with higher growth prospects. These institutions sell out of their investment and the local currency, thus increasing supply of the currency and pushing down the money\u2019s worth. So, when a country or region has poor economic news, the value of the currency tends to fall. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>However, the pound picked up sharply as UK Prime Minister Theresa May discussed the momentum in Brexit talks when she appeared in UK Parliament on Monday. Investors are increasingly hopeful that Brexit negotiations will progress to transition deal and trade deal talks before the end of the year. Theresa May boosted these hopes by saying that the country is \u201cwithin touching distance\u201d of moving onto the next stage of the negotiations. The pound rallied as hopes of a smooth Brexit increased.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why is a smooth Brexit good for the pound? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>A smoother Brexit would be a scenario in which the economic consequences of leaving the European Union are minimised. This is favourable for the pound because the less the Brexit impact on the economy, the more likely that foreign investors will remain interested in the UK. Foreign investors need sterling to invest in the country and so the more GBP is purchased, the higher the demand and, thus, an increase in the currency\u2019s value. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<h2><a href=\"#will-us-manufacturing-service-sector-data-keep-the-dollar-firm-\" name=\"will-us-manufacturing-service-sector-data-keep-the-dollar-firm-\"><\/a>Will US manufacturing &amp; service sector data keep the dollar firm?<\/h2>\n<p>Meanwhile, the outlook for the dollar was also strong, albeit slightly weaker than the pound. The dollar showed strength on Monday, as investors continued to cheer the increased likelihood of Trump\u2019s pro-growth tax reform being pushed through. The tax reform would include a clause that would enable US firms to repatriate money held overseas, encouraging them to bring this money back into the US. This would boost the demand for the dollar which is why the dollar rallied.<\/p>\n<p>The US economic calendar was quiet in the previous session. However, today sees the release of manufacturing and service sector activity data. Analysts are expecting both sectors to report an increase in activity since last month. Should this be the case then the dollar could rally higher.<\/p>\n<p>Meanwhile, investors are still awaiting President Trump\u2019s choice to replace Federal Reserve Chair Janet Yellen. Yellen\u2019s term finishes in February next year and her replacement is expected to be announced over the coming days. Should the market consider the new Chair to be more conservative than Yellen, the dollar could then fall. However, if the Fed chair is replaced by someone considered aggressive in financial policy, that would see the dollar climb.<\/p>\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis 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 Inc., Currency Live 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. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>On Monday, the pound proved just how politically driven it is. Sterling gained versus the US dollar despite UK business optimism dropping to its lowest level in a year. After a slow start for the pound in the previous session, it reversed losses in the afternoon, moving higher versus the strong dollar. The pound US [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4017,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1386,1394,1398],"class_list":{"0":"post-4016","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"category-usd","9":"tag-brexit","10":"tag-gbp","11":"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>Pound vs Dollar Given a Late Boost by Hopes in Brexit Momentum - 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\/100196-gbp-usd-brexit-hopes-soar\/\" \/>\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\\\/100196-gbp-usd-brexit-hopes-soar\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100196-gbp-usd-brexit-hopes-soar\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Pound vs Dollar Given a Late Boost by Hopes in Brexit Momentum\",\"datePublished\":\"2017-10-24T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100196-gbp-usd-brexit-hopes-soar\\\/\"},\"wordCount\":864,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100196-gbp-usd-brexit-hopes-soar\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100196-gbp-usd-brexit-hopes-soar.jpg\",\"keywords\":[\"Brexit\",\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100196-gbp-usd-brexit-hopes-soar\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100196-gbp-usd-brexit-hopes-soar\\\/\",\"name\":\"Pound vs Dollar Given a Late Boost by Hopes in Brexit Momentum - 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