Pound US dollar exchange rate: GBP/USD eases as Boris Johnson expected to become PM

Brexiter Boris Johnson is a strong favourite to succeed Prime Minister Theresa May, and confirmation of his victory could increase no-deal Brexit fears. Former Health Minister and Tory rebel Philip Lee said: “It is going to be really challenging for him to govern. I don’t see how he has got a majority to govern. It’s a very, very fragile situation with only a tiny majority.” 

The US dollar, meanwhile, has benefited from a general scaling back on expectations of a steep Federal Reserve interest rate cut this month.

Win Thin, the Global Head of Currency Strategy at Brown Brothers Harriman, commented: “[N]early three cuts this year… seems way too dovish in light of firm US retail sales and jobs data.” 

“The [US] manufacturing sector remains a concern, but even that seems to be recovering in July”

US dollar traders, meanwhile, will be awaiting today’s US house price data. 

An increase in house prices would be USD supportive. 

However, US existing home sales are forecast to have fallen by -0.1% on the month in June. 

Today will also see Andrew Haldane, the Chief Economist at the Bank of England, deliver a speech. 

Speaking to BBC’s Newsnight, Mr Haldane has previously commented that Brexit is continuing to undermine efforts to boost the UK’s economy.

Any further dovish comments today would prove pound-negative, although investors will largely be focusing on the latest political developments. 

source: express.co.uk