{"id":5964,"date":"2019-09-09T02:05:26","date_gmt":"2019-09-09T06:05:26","guid":{"rendered":"https:\/\/currencylive.com\/?p=5964"},"modified":"2019-09-09T02:05:26","modified_gmt":"2019-09-09T06:05:26","slug":"101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\/","title":{"rendered":"GBP\/USD: Pound Heads Lower As UK In Turmoil"},"content":{"rendered":"

Despite falling 0.4% on Friday, the pound US dollar gained 1% across the first week of September. The pound US dollar exchange rate rallied to a high of US$1.2354 before closing at US$1.2282. The pair is edging lower in early trade on Monday.<\/p>\n

 <\/p>\n\n\n\n\n
What do these figures mean?<\/strong><\/td>\n<\/tr>\n
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

For example, it could be written:<\/p>\n

1 GBP = 1.28934 USD<\/em><\/p>\n

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.<\/p>\n

Or, if you were looking at it the other way around:<\/p>\n

1 USD = 0.77786 GBP<\/em><\/p>\n

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>\n

The pound experienced high levels of volatility across the previous week as Brexit events unfolded. After sinking to a 2-year low, sterling then rallied to a 6-week high.<\/p>\n

Whilst Parliament successfully passed a bill to prevent a no deal Brexit, uncertainty still lingers. Investors await confirmation of the bill\u2019s royal ascent. However, Boris Johnson\u2019s team suggested over the weekend that the PM could ignore the legislation, potentially taking the fight to the Supreme Court. In other words, a no deal Brexit could still happen even if the anti \u2014 hard Brexit bill becomes law.<\/p>\n

In a week of chaos in Westminster, Boris Johnson suffered two humiliating defeats, sacked 21 high profile MP\u2019s, saw his brother quit the party and endured the resignation of his works and pensions minister Amber Rudd. However, his team believes that his aggressive Brexit strategy is winning the support of Leavers across the county.<\/p>\n

With nothing set in stone, this week is set to be another key week for Brexit and the pound. Questions surrounding no deal Brexit, the possibility of an election and the extent of political chaos in Westminster will continue to drive movement in sterling.<\/p>\n

 <\/p>\n\n\n\n\n
Why is a \u201csoft\u201d Brexit better for sterling than a \u201chard\u201d Brexit?<\/strong><\/td>\n<\/tr>\n
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>\n

Today investors will also look towards a busy day for UK economic data. These include GDP, industrial production and trade balance.<\/p>\n

Dollar Dipped Post US Jobs Report<\/strong><\/h3>\n

The dollar dropped versus most of its peers on Friday, although not the pound. Demand of the dollar took a hit after weaker than forecast US jobs report. The non-farm payroll report is the most closely watched economic data release across the month. The data showed that only 130,000 jobs were created in US in August. This was less than the 160,000 that analysts had forecast. Unemployment remained steady at 3.7% and wages grew 3.2% year on year. July\u2019s job creation headline figure was also revised downwards.<\/p>\n

Whilst the US labour market continues to grow, the rate of growth has slowed considerably. Given the international backdrop and concerns over the US \u2014 Sino trade dispute caution is starting to creep in and could be making firms increasingly cautious about hiring.<\/p>\n

 <\/p>\n\n\n\n\n
How does the non-farm payroll (NFP) affect the US dollar?<\/strong><\/td>\n<\/tr>\n
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 up the currency\u2019s worth.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

This week the big data release will be on Thursday \u2014 the US inflation reading. Other data points of interest include US Michigan sentiment index.<\/p>\n

 <\/p>\n

Currency<\/em>live.com\u00a0 is a site operated by TransferWise Inc. (“We”, “Us”), a Delaware Corporation.\u00a0<\/em><\/h6>\n
The content on our site is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or retain from, any action on the basis of the content on our site.<\/em><\/h6>\n
Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views. <\/em><\/h6>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Despite falling 0.4% on Friday, the pound US dollar gained 1% across the first week of September. The pound US dollar exchange rate rallied to a high of US$1.2354 before closing at US$1.2282. The pair is edging lower in early trade on Monday.   What do these figures mean? When measuring the value of a […]<\/p>\n","protected":false},"author":163946597,"featured_media":5112,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1396,1386,1394,1406,1391,1392,1431,1397,1499,1398],"class_list":{"0":"post-5964","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-gbp","8":"category-usd","9":"tag-boris-johnson","10":"tag-brexit","11":"tag-gbp","12":"tag-no-deal","13":"tag-pound","14":"tag-sterling","15":"tag-trade-war","16":"tag-us-dollar","17":"tag-us-non-farm-payroll","18":"tag-usd"},"acf":[],"yoast_head":"\nGBP\/USD: Pound Heads Lower As UK In Turmoil - 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\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\/\" \/>\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=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Heads Lower As UK In Turmoil\",\"datePublished\":\"2019-09-09T06:05:26+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\\\/\"},\"wordCount\":943,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100766-gbp-usd-brexit-nerves-hit-pound.jpg\",\"keywords\":[\"boris johnson\",\"Brexit\",\"gbp\",\"no deal\",\"pound\",\"sterling\",\"trade war\",\"us dollar\",\"US non farm payroll\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101138-gbp-usd-pound-heads-lower-as-uk-in-turmoil\\\/\",\"name\":\"GBP\\\/USD: Pound Heads Lower As UK In Turmoil - 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