GBP/USD: MPs return to Parliament will bring volatility to UK assets
UK assets, particularly the pound, are expected to see increased volatility in September when MPs return to the House of Commons next month where lawmakers will look to push for a no confidence vote in the government.
Volatility is likely to increase across a host of UK assets, particularly the price of British sterling, in September when MPs return to Parliament after the summer recess, IG Senior Market Analyst Chris Beauchamp said.
British lawmakers will return to the House of Commons on September 3 and are expected to push for a no confidence vote in the Conservative-led government, he added.
GBP/USD: remains firmly in a downtrend
The pound against the US dollar has enjoyed a strong rally from the lows of August.
However, the currency remains firmly in a downtrend over the last five to six months, with it falling from $1.33118 levels in mid-March to low of $1.20224 on August 12.
The pound closed at $1.22864 against the dollar on Tuesday.
Weaker dollar could see sterling trade higher
If the dollar weakens, however, the pound could see gains, particularly if the US-China trade war continues to worsen and US President Donald Trump piles further pressure on the Federal Reserve to slash interest rates.
So far, the US central bank has denied Trump the rate cuts he has demanded, with policymakers unwilling to lower rates to assist the president in his negotiations with Beijing.
‘The Federal Reserve’s policy decisions are guided solely by its congressional mandate to maintain price stability and maximum employment,’ a Federal Reserve spokeswoman said on Thursday. ‘Political considerations play absolutely no role.’
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Start trading forex today
Find opportunity on the world’s most-traded – and most-volatile – financial market.
- Trade spreads from just 0.6 points on EUR/USD
- Analyse with clear, fast charts
- Speculate wherever you are with our intuitive mobile apps
See an FX opportunity?
Try a risk-free trade in your demo account, and see whether you’re onto something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See an FX opportunity?
Don’t miss your chance – upgrade to a live account to take advantage.
- Get spreads from just 0.6 points on popular pairs
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See an FX opportunity?
Don’t miss your chance. Log in to take your position.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
