{"id":6154,"date":"2019-09-26T05:00:21","date_gmt":"2019-09-26T09:00:21","guid":{"rendered":"https:\/\/currencylive.com\/?p=6154"},"modified":"2019-09-26T04:54:44","modified_gmt":"2019-09-26T08:54:44","slug":"101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\/","title":{"rendered":"GBP\/USD: Pound Extends Losses vs Dollar, US GDP In Focus"},"content":{"rendered":"

The pound tumbled over 1% versus the US dollar on Wednesday. The pound US dollar exchange rate fell to a low of US$1.2350, approximately where is closed the session. The pound trending lower versus the dollar in early trade on Thursday.<\/p>\n

The pound sunk in the previous session even as members of Parliament returned to work following the Supreme Court ruling that Boris Johnson unlawfully suspended Parliament. Any optimism surrounding the court\u2019s decision has well and truly fizzled out. Instead investors are growing concerned over what could happen next.<\/p>\n

Boris Johnson returned to the House of Commons defiant and with no intention of quitting. If anything, the decision by the Supreme Court appears to have hardened his resolve to get Brexit done on or before 31st<\/sup> October.<\/p>\n

Boris Johnson has invited opposition parties to call a vote of no confidence which could then lead to a general election. The mere prospect of a general election with just 5 weeks to go until Brexit is unnerving pound traders. However, opposition leaders are unlikely to go down this path as Boris Johnson could opt to hold the general election after 31st<\/sup> October and therefore after the UK has left the EU.<\/p>\n

Cabinet minister Michael Gove was insisting on Wednesday that Brexit talks were going well. The European Union have been less optimistic saying that British proposals are so far unsatisfactory. Even though Parliament is back in session, a resolution to Brexit is still a long way off. Uncertainty remains high which is keeping the pound under pressure.<\/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

Will US GDP Weigh On Dollar?<\/strong><\/h3>\n

The dollar rose early on in the previous session as investors digested reports that an impeachment investigation into President Trump was being launched. The dollar then rallied on relief as President Trump released the transcripts of the calls in question and the Department of Justice ruled that he had not violated any election financing rules.<\/p>\n

Trade developments also supported the dollar in the previous session as President Trump advised that a deal could happened sooner than you think. His comments were sufficient to lift market\u2019s mood.<\/p>\n

Today investors will look towards US GDP data. Analysts predict that the US economy grew 2% in the second quarter. This will be the final revision; it is slightly lower than the initial 2.1% reading. Any weakness in the figure could fuel speculation that the Fed will consider cutting interest rates further and as a result pull the dollar lower.<\/p>\n\n\n\n\n
Why do interest rate cuts drag on a currency\u2019s value?<\/b><\/td>\n<\/tr>\n
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. Lower interest rate environments tend to offer lower yields. So, if the interest rate or at least the interest rate expectation of a country is relatively lower compared to another, then foreign investors look to pull their capital out and invest elsewhere. Large corporations and investors sell out of local currency to invest elsewhere. More local currency is available\u00a0 as the demand of that currency declines, dragging the value lower.\u00a0<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\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

This publication is provided as general information only and is not intended as an exhaustive treatment of its subject. TransferWise Inc. and its affiliates (“we” or “us”) expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of this publication, and you may not rely thereon for any purpose. You should consult with qualified professionals or specialists 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, investment or other professional advice from us.\u00a0 We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"

The pound tumbled over 1% versus the US dollar on Wednesday. The pound US dollar exchange rate fell to a low of US$1.2350, approximately where is closed the session. The pound trending lower versus the dollar in early trade on Thursday. The pound sunk in the previous session even as members of Parliament returned to […]<\/p>\n","protected":false},"author":163946597,"featured_media":5571,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1379,1381],"tags":[1386,1483,1394,1409,1406,1474,1391,1392,1462,1400,1397,1398],"class_list":{"0":"post-6154","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-election","11":"tag-gbp","12":"tag-gdp","13":"tag-no-deal","14":"tag-parliament","15":"tag-pound","16":"tag-sterling","17":"tag-trade","18":"tag-trump","19":"tag-us-dollar","20":"tag-usd"},"acf":[],"yoast_head":"\nGBP\/USD: Pound Extends Losses vs Dollar, US GDP In Focus - 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\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\/\" \/>\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\\\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"GBP\\\/USD: Pound Extends Losses vs Dollar, US GDP In Focus\",\"datePublished\":\"2019-09-26T09:00:21+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\\\/\"},\"wordCount\":895,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100625-gbp-usd-odds-at-no-deal-brexit.jpg\",\"keywords\":[\"Brexit\",\"election\",\"gbp\",\"gdp\",\"no deal\",\"parliament\",\"pound\",\"sterling\",\"trade\",\"trump\",\"us dollar\",\"usd\"],\"articleSection\":[\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101184-gbp-usd-pound-extends-losses-vs-dollar-us-gdp-in-focus\\\/\",\"name\":\"GBP\\\/USD: Pound Extends Losses vs Dollar, US GDP In Focus - 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