020 7898 0500The US dollar spent most of the day on the back foot day for three reasons. Firstly, the UK High Court ruled against the government’s wanting to implement Article 50 without the need to consult Parliament. There is a consensus that the majority of MPs would have voted to stay in Europe and as such, if parliament is involved in the process, the Brexit process could end up a lot ‘softer’ than initially thought. This helped buoy the pound, at the expense of the dollar.
In the same light, the dollar was also weakened by worse-than-expected unemployment claims data, which came out around 10,000 worse than expected. Manufacturing data also pointed to a downward trend in the US. Finally, with ongoing US election saga still at the forefront of most people’s minds, the narrowing of the polls on Trump vs Hillary suggests that Trump is still very much in with a chance. This is thought of as a risk for the US dollar.
1.25 is very much in the sights of for sterling against the dollar, and technical guidance suggests we could get close. However, this is a very big psychological level and in this fragile macroeconomic environment, another news story today could push the currency pair back down as quickly as it has come up.
