Pound US dollar exchange rate: GBP strengthens as Theresa May warns of Brexit delay
Pound US dollar exchange rate: GBP rose roughly 0.3 per cent (Image: GETTY)
The pound is rising against the US dollar and the majority of its other peers this morning, as Theresa May warns that Article 50 could be delayed or even cancelled if she loses a no-confidence vote later this evening. While Sterling fell overnight on Tuesday as reports emerged that rebel Conservatives had delivered the 48 letters of no-confidence required to force a vote, pound investors appear to have welcomed the suggestion that it could result in Brexit being delayed. This has led to the pound US dollar pairing creeping higher this morning. Speaking outside Downing Street after it was confirmed the ballot would take place, the Prime Minister warned the move could compromise Brexit, while vowing to “contest that vote with everything I have got”.
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Mrs May’s warning was echoed by Justice Secretary David Gauke who told BBC Radio 4 this morning: “If she loses tonight whoever is Prime Minister will have to delay Article 50.
“I cannot see how we can possibly leave on 29 March.”
At the same time, the US dollar is subdued this morning as demand for the safe-haven currency ease as China prepares to cut tariffs on US car imports.
The move has renewed hopes that trade tensions between the US and China are cooling, with the news that Donald Trump was prepared to intervene on behalf of Huawei’s CFO, Meng Wanzhou over charges of allegedly violating US sanctions against Iran.
Speaking to Reuters Mr Trump said: “If I think it’s good for the country, if I think it’s good for what will be certainly the largest trade deal ever made – which is a very important thing – what’s good for national security – I would certainly intervene if I thought it was necessary.”
Coming up later today will be the release of the latest US consumer price index, with the data potentially helping to bolster the pound US dollar exchange rate if inflation is shown to have slowed as expected last month as forecast.
A dip in inflation is likely to lead to further speculation that the Federal Reserve will pause interest rates after a widely expected hike next week.
Meanwhile movement in the pound throughout the remainder of the week will largely be dependent on this evening’s vote and the outcome’s perceived impact on Brexit.