Pound US dollar exchange rate: GBP rises as Trump urges Fed to 'rocket' US economy

The pairing rose on renewed Brexit hopes following Prime Minister Theresa May’s announcement that cross-party talks should conclude by the end of next week. While US President Donald Trump has urged the Federal Reserve to cut interest rates by one per cent to encourage the economy to “go up like a rocket”. US dollar traders will be awaiting the US Federal Reserve’s interest rate decision later today, which – despite Mr Trump’s urgings – is expected to hold steady at 2.5 per cent. Mr Trump sounded optimistic about the US economy in a new tweet.

He said: “China is adding great stimulus to its economy while at the same time keeping interest rates low.

Our Federal Reserve has incessantly lifted interest rates, even though inflation is very low, and instituted a very big dose of quantitative tightening.”

This came after yesterday’s easing Chinese manufacturing figures, which saw the greenback benefit from its safe-haven status. 

Today will see the publication of the US ISM Manufacturing PMI figures for April, which are expected to ease to 55.0, down from March’s 55.3.  

Meanwhile in Brexit news, a spokesman for Theresa May has bolstered optimism.

He said: “Further [cross-party] will now be scheduled in order to bring the process toward a conclusion.

Cabinet also discussed the need to secure safe passage of the Withdrawal Agreement Bill as soon as possible in order to deliver upon the result of the referendum.”

Sterling investors have been uplifted on hopes of a breaking of the Brexit deadlock, as cross-party talks are now expected to draw a consensus across both major parties. 

Furthermore, the Labour Party has also agreed to back a second referendum – with caveats – in its upcoming manifesto for the European Elections. 

In economic news, this morning saw the publication of the UK Markit Manufacturing PMI figures for April, which eased to 53.1, although this was still above expectations. 

Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply adopted a glass-half-full stance, blaming Brexit for the fall.

He said: “As Brexit prevarication continued, overseas clients took to action and found new supply chain routes away from the UK resulting in the second-fastest drop in new export orders in four-and-a-half years.”

The pound US dollar exchange rate will remain sensitive to political discussions between Labour and the Conservatives today as the two parties continue to push for a conclusion on their Brexit talks ahead of next week. 

Apart from this, market focus will remain on the Federal Reserve this evening, with traders keen to see which path forwards the central bank will take. 

source: express.co.uk