{"id":5001,"date":"2018-10-31T00:00:00","date_gmt":"2018-10-31T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100710-gbp-usd-sp-predicts-recession\/"},"modified":"2018-10-31T00:00:00","modified_gmt":"2018-10-31T04:00:00","slug":"100710-gbp-usd-sp-predicts-recession","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100710-gbp-usd-sp-predicts-recession\/","title":{"rendered":"GBP\/USD: Pound At 11 Week Low vs. Dollar On Brexit Fears"},"content":{"rendered":"<p>Brexit fears really started to take hold of the pound on Tuesday. The pound fell to its lowest level in 11 months against the stronger dollar, touching a low point of US$1.2698.<\/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>\n<p>Just one day after UK Chancellor\u2019s optimistic budget, Brexit fears were once again driving movement in the pound. As the clock keeps ticking, investors are growing increasingly nervous over the lack of progress. Talks appear to still be in deadlock at a time when the deal should be on the table.<\/p>\n<p>The lack of development was accompanied by comments from the rating agency, the S&amp;P, which said that a no deal disorderly Brexit would result in the UK falling into recession. The picture painted by the S&amp;P was extremely gloomy with economic growth falling negative and unemployment rising to 7%, a level higher than during the financial crisis. Furthermore, the rating agency forecast inflation at 4.7% and house prices to decline by 10%.<\/p>\n<p>The S&amp;P\u2019s forecasts echoed those of business leaders and leading economists that have predicted the UK economy falling into very difficult times amid a no deal Brexit.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit?<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>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>Today investors will continue to focus on Brexit. They will also glance towards consumer confidence figures for October. Analysts expect the data to show that consumer confidence dipped again, hardly surprising given the uncertainty surrounding Brexit.<\/p>\n<h2><a href=\"#us-data-keeps-supporting-the-dollar\" id=\"us-data-keeps-supporting-the-dollar\"><\/a>US Data Keeps Supporting the Dollar<\/h2>\n<p>The dollar was lifted in the previous session after US consumer confidence hit a fresh 18 year high, highlighting the growing differences between the US and UK consumer. Analysts had been expecting US consumer confidence to tick lower in October to 136. Instead confidence jumped higher to 137.9.<\/p>\n<p>The strong jobs market is supporting households and giving consumers confidence in the future outlook of the economy. This is important because confident consumers spend money, which continues to support the US economy.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>How does strong jobs data boost the currency?<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>It works like this, when there is low unemployment and high job creation, the demand for workers increases. As demand for workers goes up, wages for those workers also go up. Which means the workers are now taking home more money to spend on cars, houses or in the shops. As a result, demand for goods and services also increase, pushing the prices of the goods and services higher. That\u2019s also known as inflation. When inflation moves higher, central banks are more likely to raise interest rates, which then pushes the worth of the currency higher.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Today investors will continue to focus on the US economic calendar, with the ADP private payroll figures under the spotlight ahead of the US jobs report on Friday. A strong reading could help the dollar move higher.<\/p>\n<hr \/>\n<p><small><\/p>\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>Brexit fears really started to take hold of the pound on Tuesday. The pound fell to its lowest level in 11 months against the stronger dollar, touching a low point of US$1.2698. What do these figures mean? When measuring the value of a pair of currencies, one set equals 1 unit and the other shows [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5002,"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-5001","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: Pound At 11 Week Low vs. Dollar On Brexit Fears - 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\/100710-gbp-usd-sp-predicts-recession\/\" \/>\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\\\/100710-gbp-usd-sp-predicts-recession\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100710-gbp-usd-sp-predicts-recession\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound At 11 Week Low vs. Dollar On Brexit Fears\",\"datePublished\":\"2018-10-31T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100710-gbp-usd-sp-predicts-recession\\\/\"},\"wordCount\":854,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100710-gbp-usd-sp-predicts-recession\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100710-gbp-usd-SP-predicts-recession.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\\\/100710-gbp-usd-sp-predicts-recession\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100710-gbp-usd-sp-predicts-recession\\\/\",\"name\":\"GBP\\\/USD: Pound At 11 Week Low vs. Dollar On Brexit Fears - 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