Pound US dollar exchange rate: GBP rallies as Theresa May presses forward with Brexit

The pound is edging higher against the US dollar and the majority of its other peers at the start of this week’s session as a defiant Theresa May pushes ahead with her controversial Brexit plan.

The Prime Minister spoke at the Confederation of British Industry’s (CBI) annual conference later today, where she pushed for the backing of business leaders as she insisted her deal had been “agreed in full”.

Mrs May promoted the deal by outlining how it will allow the UK to control immigration and lead to migration becoming more skills-based.

The Prime Minister told attendees at the CBI conference: “Getting back full control of our borders is an issue of great importance to the British people.”

She added that EU citizens will no longer “jump the queue ahead of engineers from Sydney or software developers from Delhi”.

However pound investors remain well aware that the Prime Minister faces a possible vote of no-confidence this week, something which appears to have capped gains this morning.

This is despite rebel MP’s apparently struggling to muster the 48 letters needed to trigger a vote.

At the same time questions over whether the Federal Reserve may begin to slow the pace of monetary tightening in 2019 continue to hang over the US dollar this morning.

This follows comments from Fed Vice-Chair Richard Clarida on Friday in which he suggested that interest rates are getting closer to a “neutral” level, prompting speculation the Fed could target fewer rate hikes next year.

Speaking to CNBC last week Mr Clarida said: “As you move in the range of policy that by some estimates is close to neutral, then with the economy doing well it’s appropriate to sort of shift the emphasis toward being more data dependent.”

Looking to the week ahead, a lull in notable data is likely to result in investors remaining laser focused on UK politics.

This may result in the pound US dollar exchange rate remaining volatile, with the pairing’s fortunes likely tied to whether or not the rebel MPs are able to trigger a vote of no-confidence against Mrs May.

Meanwhile the US dollar could face a setback later this week, with an expected contraction in US durable goods orders likely to weaken US dollar demand on Wednesday.

source: express.co.uk