Seven Factors That Drive the U.S. Dollar-British Pound Rate

CME Group
Economic Research

Factors that Move GBP/USD Exchange Rate

By Erik Norland, Senior Economist CME Group

How Monetary Policy Shapes GBP/USD

  • GBP/USD tends to correlate positively to U.S. dollar-euro exchange rate.
  • Brexit-related politics played a big role in influencing GBP/USD in past years.
  • GBP has lagged gains in USD and EUR possibly due to underperformance of U.K. economy.
  • Investors expect BOE to trail the Fed in the pace of rate increases to come.
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