Pound US Dollar exchange rate slides as Macron pushes for ‘tighter deadline’ on Brexit

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Pound US Dollar exchange rate slides as Macron pushes for ‘tighter deadline’ on Brexit 1

While many European leaders support an extension, the length of the delay could cause further Brexit uncertainty. The Prime Minister has previously stated that a delay extending into the New Year would see his government push for a general election, a move which would deepen market uncertainty to the detriment of the pound. Both the German Chancellor Angela, Merkel and Irish Taoiseach, Leo Varadkar have come out in support of a three-month delay, but reports reveal that French President Emmanuel Macron is pressing for a closer November 15 deadline. 

Hussein Sayed, Chief Market Strategist at FXTM commented: “Although the French are pushing for a tighter deadline, the base case scenario remains until January 31. If this extension is granted, then a UK general election will likely be the next step.

“If an election is called and approved by the House of Commons, expect to see more volatility in Sterling, although any downside pressure will be limited given that a hard Brexit scenario is now off the table.”

Meanwhile, the US dollar rose on Thursday afternoon despite data revealing trade tensions and uncertainty had seen US factory orders slide by the largest amount in four months. 

The US Commerce Department said that durable goods slumped by 1.1 percent in September as both a global slowdown and President Donald Trump’s trade policies weighed on manufacturing. 

Economists suggest a more drastic slowdown in growth could have been expected if not for the Federal Reserve’s two interest rate cuts this year. 

The Fed is due to meet again next week and markets largely predict another 25 basis point rate reduction, which is likely to leave the US dollar under fresh pressure.

Daily Express :: City and Business Feed


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