Pound US dollar exchange rate: GBP flat against USD as Theresa May promises to resign

Theresa May is today continuing with efforts to persuade MPs to back her Brexit withdrawal agreement. Yesterday, Mrs May promised to resign as Prime Minister if her deal was approved, which brought some MPs on side including the ex-foreign secretary, Boris Johnson.  However, the Prime Minister still lacks the support of the Democratic Unionist Party (DUP), who have said they would not back her deal because of the Irish backstop issue. Meanwhile, after seizing control from the government, the House of Commons was not able to come to a Brexit consensus following yesterday’s indicative votes, with all eight options being rejected.

Wednesday afternoon saw the US Treasury yields fall to a low of 2.34 per cent, the lowest since December 2017.

This saw investors grow surer that the Federal Reserve will be forced to cut interest rates this year, weighing on the ‘greenback’.

Comments from Stephen Moore, who is expected to be nominated by President Donald Trump for an open seat at the Fed, likely dampened sentiment as he told the New York Times that he believed the Fed should “immediately reverse course and cut rates by half a percentage point.”

Later today, the US dollar could slip against Sterling following the release of the US Q4 2018 annualised GDP figure.

If GDP shows growth of 2.4 per cent, or prints lower than forecast compared to the previous year, it could dampen sentiment in the US dollar. 

Looking ahead to Friday, March’s GfK UK consumer confidence is due for release, with traders anticipating a slight increase over the previous month. 

Despite this, markets will almost certainly remain fully fixated on Brexit and the consequences of the latest round of votes, with any data releases playing second fiddle.

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