This comes following controversy in the US after President Donald Trump inadvertently revealed a ‘secret’ US-Mexico immigration deal. Refusing to discuss the plans with reporters, Mr Trump waved around a sheet of paper that contained the specifics of the agreement. The paper, it was spotted, described the plan to designate Mexico as a “safe third country” which would mean migrants’ asylum applications would be processed there instead of in the United States. Mexico has 45 days to show it is able to stem the flow of migrants by deploying its National Guard to the border with Guatemala.
Despite the revelation, risk-appetite continues to decline on currency markets even as tensions between the US and China over trade remains heightened.
Meanwhile, on Tuesday data revealed that UK unemployment remained at a 44-year low of 3.8 per cent and the number of people in employment jumped to a record high.
Commenting on the data, Chief Economist at the Institute of Directors, Tej Parikh stated: “The buoyant labour market is still going strong for the UK economy, even as it weathers widespread political uncertainty.
“However, the employment boom cannot last forever, and is certainly showing signs of softening.”
Looking ahead to this afternoon, the US dollar could rise against Sterling following the release of the US Consumer Price Index (CPI).
If it is revealed that inflation has risen higher than forecast it would support Federal Reserve Chair Jerome Powell’s claim that softer inflation is only temporary, which could provide an upswing of support for the greenback.
Looking to tomorrow, the US dollar could continue to edge up against the pound following the release of the latest US jobless figures.
If the number of Americans claiming unemployment benefits falls lower than expected, the US dollar will likely benefit.