{"id":4552,"date":"2018-05-09T00:00:00","date_gmt":"2018-05-09T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100466-gbp-usd-us-quits-iran-agreement\/"},"modified":"2018-05-09T00:00:00","modified_gmt":"2018-05-09T04:00:00","slug":"100466-gbp-usd-us-quits-iran-agreement","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100466-gbp-usd-us-quits-iran-agreement\/","title":{"rendered":"GBP\/USD: Dollar Supported vs. Pound As US Quits Nuclear Agreement"},"content":{"rendered":"<p>After an initial bounce, the pound US dollar exchange rate traded lower on Tuesday. Whilst little in the way of economic data from either side, there were plenty of headlines to influencing trade. The pound US dollar hit a peak of US$1.3592, before settling around US$1.3545 towards the end of trading.<\/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>Pound traders have had very little in the way of economic data to drive trading so far this week. Instead market participants have been focusing on the increasing political turmoil within the UK government and the lack of clarity over Brexit. Infighting in the UK Conservative party over Theresa May\u2019s proposed customs partnership with the EU rocked the government and limited the pound earlier in the week. Theresa May was dealt another blow on Tuesday as the House of Lords defeated the government&#8217;s plans for a specific date for Brexit. The Lords voted against this believing that it puts the UK at a disadvantage in negotiations. This is yet another showing against UK Prime Minister Theresa May, who some political analysts suggest won\u2019t be in power then.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>How does political risk have impact on a currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Political risk drags on the confidence of consumers and businesses alike, which means 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. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>The UK economic calendar has been very quiet this week and this is also the case today. Investors will now look ahead to the Bank of England rate decision tomorrow.<\/p>\n<h2><a href=\"#fed-chair-powell-boosts-the-dollar\" name=\"fed-chair-powell-boosts-the-dollar\"><\/a>Fed Chair Powell Boosts The Dollar<\/h2>\n<p>The US dollar remained strong for yet another session on Tuesday. An early speech by Federal Reserve Chair Jerome Powell supported the dollar. Mr Powell confirmed that the Fed intends to continue with the current pace of hiking. He also confirmed that the economy was still showing signs of being able to support further rate hikes. These were considered hawkish comments pointing to more interest rates to come.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>President Trump withdrawing from the US \u2014 Iran nuclear arms pact actually had little impact on the dollar. Investors had been fretting that the increased geopolitical tensions would have lifted the dollar, but that hasn\u2019t been the case after President Trump withdrew from the agreement; an agreement which saw the US waiver sanctions on Iran in exchange for a reduction in Iran\u2019s nuclear programme. Investors will watch the fallout from the US withdrawal closely.<\/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>After an initial bounce, the pound US dollar exchange rate traded lower on Tuesday. Whilst little in the way of economic data from either side, there were plenty of headlines to influencing trade. The pound US dollar hit a peak of US$1.3592, before settling around US$1.3545 towards the end of trading. What do these figures [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":4553,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1394,1398],"class_list":["post-4552","post","type-post","status-publish","format-standard","has-post-thumbnail","category-gbp","category-usd","tag-gbp","tag-usd"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>GBP\/USD: Dollar Supported vs. Pound As US Quits Nuclear Agreement - 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\/100466-gbp-usd-us-quits-iran-agreement\/\" \/>\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\\\/100466-gbp-usd-us-quits-iran-agreement\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100466-gbp-usd-us-quits-iran-agreement\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Dollar Supported vs. Pound As US Quits Nuclear Agreement\",\"datePublished\":\"2018-05-09T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100466-gbp-usd-us-quits-iran-agreement\\\/\"},\"wordCount\":843,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100466-gbp-usd-us-quits-iran-agreement\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100466-gbp-usd-us-quits-iran-agreement.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2018\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100466-gbp-usd-us-quits-iran-agreement\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100466-gbp-usd-us-quits-iran-agreement\\\/\",\"name\":\"GBP\\\/USD: Dollar Supported vs. Pound As US Quits Nuclear Agreement - 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