The US dollar closed the week at the lowest levels seen against the pound in 7 weeks, after it seemed more likely that UK Prime Minister Theresa May’s Brexit deal would not be approved at a vote on Tuesday, calling for the official Brexit deadline date of 29th March to be pushed back to allow for more time to prepare a deal. To put this into monetary terms, a $200,000 purchase is now £7,500 less expensive compared to the GBP/USD lows seen at the beginning of January, and has provided our clients with a great opportunity to take advantage of. As this week is expected to be extremely volatile for GBP/USD exchange rates, clients may wish to consider taking advantage of these levels in case the vote tomorrow eliminates the recent GBP gains, making a US dollar purchase more expensive.
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Today marks the 24th day of the US partial Government shutdown, officially the longest in history, and with no end in sight. The shutdown is due to a dispute between Donald Trump and the democrats over funding for the US-Mexico border wall which Trump has demanded a budget of $5.7billion to build.
Around 800,000 Government employees were not paid on Friday, pushing many to selling their belongings and post fundraising appeals online to help pay their debts. This has also had a knock on effect on transport with Miami International Airport announcing the closure of one of its terminals due to the shortage of staff and security officers.
There have now been at least 3 lawsuit cases filed from unions protecting unpaid workers.
Trump is now considering declaring a situation of National Emergency which would allow him to take funding from other areas to use for building the wall, bypassing Congress. This move would likely call for a court challenge by the Democrats, who are strongly opposed to the wall, claiming that it would be barbaric and ineffective. It is likely that the partial shutdown will have an impact on US employment and wage figures, retail sales, and the economy as a whole, if a resolution is not found imminently which would likely push the US dollar to fall further.
US retail sales figures will be released on Wednesday afternoon and are expected to remain at 0.2% in December. Initial and Continuing jobless claims are released on Thursday which could be impacted by the current partial shutdown, therefore if you have a transfer to make involving the US dollar please get in touch with us today to help you to plan around these events.
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