The British Pound exchange rate has fallen to its weakest level since January, tumbling below the 1.27 benchmark against the US Dollar (GBP/USD). The Pound to US Dollar exchange rate traded in a relatively tight range in Monday’s session, but USD exchange rate strength tipped Sterling below the 1.27 level.
Pound Sterling Exchange Rate Forecast
One of the main focal points for the Pound today will be Theresa May’s Cabinet meeting. The British Prime Minister will attempt to push her Brexit deal over the line one last time, and there could be some interesting proposals in her bid to achieve her goal. the PM could suggest closer customs ties with the EU to try and garner support from the Labour Party. There will be a vote on May’s deal in early June. However, it seems like a lot of politicians are less focused on the three-time defeated Brexit deal, and instead, are more interested in the leadership race to be May’s successor.
In other news this week, the latest UK inflation reading will be out on Wednesday, and is expected to climb higher. This might pose somewhat of a headache for the Bank of England’s (BoE) Monetary Policy Committee (MPC) when considering monetary policy. Inflation has been above the bank’s 2.0% target since 2017, with just a slight dip below at the start of this year.
The Euro has also reached a three-month high against the Pound (EUR/USD). The Pound to Euro (GBP/EUR) exchange rate is trading in the region of 1.1382.
US Dollar Exchange Rate Forecast
Meanwhile, the US Dollar has been strengthening as a risk-off approach sweeps the market. The US has been taking steps to blacklist Huawei, signalling the likelihood of a continued bout of trade tensions.
Wednesday will see the release of the latest Federal Reserve meeting minutes which could have an impact on the USD exchange rate, while Thursday will bring with it a raft of Purchasing Managers’ Indexes (PMI) detailing productivity in the services and manufacturing sectors.
The Pound to US Dollar (GBP/USD) exchange rate is currently trading at levels of 1.2694 after reaching lows of 1.2685.