Pound US dollar exchange rate: GBP remains buoyed after Brexit defeat for Theresa May

Sterling remains buoyed against the dollar as the EU withdrawal agreement was rejected by 230 votes, the worst defeat for a prime minister in recent history. The pound likely rallied on the back of the scale of the defeat, with markets assessing that it could push MPs to explore other options, and the probability of a soft Brexit increasing. It is expected that a no-confidence motion in the Prime Minister today will fail, with Conservative Brexiteers and Democratic Unionist Party (DUP) MPs stating that they would support Mrs May. In America, with the US partial shutdown of the Federal government now the longest in history, the incomplete US data releases are making it difficult to get a good reading on the economy.

Data from the Bureau of Economic Analysis and Census Bureau, such as November’s trade figures and retail sales for December, include data that has been delayed.

Economists are suggesting the pause in stats could see business confidence suffer.

Nevertheless, some data is getting out and the release of December’s US Producer Prices revealed a substantial slip.

This adds to signs of weak inflation, which could decrease the likelihood of more Federal Reserve rate hikes this year.

Despite weak economic data, the dollar was able to push back, taking advantage of the weakness in the pound caused over yesterday’s session by Brexit.

With Mrs May’s leadership challenge taking focus today, it seems likely that this will be the main catalyst for movement within the pound US dollar exchange rate over the course of the day and into this evening when the results of the vote are announced.

source: express.co.uk