{"id":5217,"date":"2019-01-24T00:00:00","date_gmt":"2019-01-24T05:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100825-gbp-usd-pound-closes-high\/"},"modified":"2019-01-24T00:00:00","modified_gmt":"2019-01-24T05:00:00","slug":"100825-gbp-usd-pound-closes-high","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100825-gbp-usd-pound-closes-high\/","title":{"rendered":"GBP\/USD: Pound Closes In On $1.31 Reduced Risk Of No Deal"},"content":{"rendered":"<p>The pound moved to within touching distance of $1.31 overnight as Britain continues to move away from a no deal Brexit. The pound is trading at the highest level versus the dollar in 11 weeks.<\/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>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.For example, it could be written:<em>1 GBP = 1.28934 USD<\/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. Or, if you were looking at it the other way around:<em>1 USD = 0.77786 GBP<\/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.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The pound surged close to 1% on Wednesday, its third consecutive day of gains as investors grow increasingly confident that the UK won\u2019t be crashing out of the EU without a deal. The latest move higher for the pound comes following the main opposition party in the UK, Labour, signalling it could support legislation to delay Britain\u2019s departure from the EU. An extension of Article 50 would delay the UK from leaving the EU on 29th March 2019.<\/p>\n<p>Delaying Brexit greatly reduces the chances of the UK leaving the EU without a deal. It provides more time for Theresa May to secure more reassurances over her Irish back stop part of the Brexit deal, or it could also mean that Brexit never happens. These options are more supportive of the pound than a hard 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>The Eurosceptics in the UK Conservative party are starting to draw behind Theresa May\u2019s Brexit deal, in the fear that Brexit now might be a very watered down version or might not happen. This could boost the chances of Theresa May\u2019s deal eventually making it through Parliament.<\/p>\n<p>With no high impacting UK data from the rest of the week, investors will remain glued to Brexit developments.<\/p>\n<h2><a href=\"#us-senate-to-vote-on-ending-us-government-shutdown\" id=\"us-senate-to-vote-on-ending-us-government-shutdown\"><\/a>US Senate To Vote On Ending US Government Shutdown<\/h2>\n<p>The dollar was broadly out of favour in the previous session. Concerns over US \u2014 Sino trade tensions and slowing growth in the global economy are bad news for the US economy. These fears continue to dominate the market. Traders are acutely aware that the Federal Reserve would struggle to raise interest rates in a slowing economy hit by trade tensions and slowing global growth. As a result, demand for the dollar has been dented.<\/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>\n<p>The continued US government shutdown is also keeping the dollar out of favour. The US Senate is to vote today on whether to re-open government. News of the reopening of government could boost the dollar. This is because all those Americans who haven\u2019t been paid, will receive their wages again. This means they can start spending again helping the economy grow.<\/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>The pound moved to within touching distance of $1.31 overnight as Britain continues to move away from a no deal Brexit. The pound is trading at the highest level versus the dollar in 11 weeks. What do these figures mean? When measuring the value of a pair of currencies, one set equals 1 unit and [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":5218,"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-5217","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 Closes In On $1.31 Reduced Risk Of No Deal - 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\/100825-gbp-usd-pound-closes-high\/\" \/>\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\\\/100825-gbp-usd-pound-closes-high\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100825-gbp-usd-pound-closes-high\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Closes In On $1.31 Reduced Risk Of No Deal\",\"datePublished\":\"2019-01-24T05:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100825-gbp-usd-pound-closes-high\\\/\"},\"wordCount\":882,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100825-gbp-usd-pound-closes-high\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100825-gbp-usd-pound-closes-high.jpg\",\"keywords\":[\"gbp\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100825-gbp-usd-pound-closes-high\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100825-gbp-usd-pound-closes-high\\\/\",\"name\":\"GBP\\\/USD: Pound Closes In On $1.31 Reduced Risk Of No Deal - 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