Another volatile week for Pound vs dollar

Pound vs dollar exchange rates are set to remain vulnerable to further Brexit woes in the wake of another series of votes held at the commons. Once again MP’s were unable to reach an agreement with regards to the best steps forward for Brexit after holding a second round of votes on alternatives to Theresa May’s Brexit deal.

Ken Clarke’s custom union option was the closest losing by just three votes 276 to 273 meaning it would appear this is the biggest chance of MP’s reaching an agreement.

This option commits the government to negotiating “a permanent UK-wide customs union with the EU” as part of any Brexit deal. It would allow the UK a closet trading relationship with the EU and reduce the need for some checks at the Irish border, a large sticking point. Its major criticism is it would prevent the UK from striking independent trade deals with other countries, one of the main reasons for leaving the EU in the first place.

As a result of this inconclusive set of votes the pound fell just shy of one cent against the US dollar, with the prospect of a no deal Brexit becoming ever more likely.

What else could impact the dollar this week?

Of course the GBP/USD movements are set to be dominated by Brexit however anyone with an interest in the US dollar should keep an eye on other key data sets this week. The main focus this week will be the key US jobs data release in the form of US non-farm payroll at 13:30 Friday. This is a key barometer for how the US economy is performing and can cause a large fluctuation is US dollar exchange rates.

Elsewhere look out for Wednesday’s Markit Services PMI at 14:45 and initial jobless claims data on Thursday at 13:30

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