Are you a British citizen living in the USA and thinking of returning to the UK? If so, you might be planning on selling your property abroad and repatriating the funds to your UK bank account.
If this is the case, it could interest you to know that the US dollar vs pound interbank exchange rate has neared its highest in 21 weeks today. In particular, the USD/GBP has hit 0.7926, just -0.06% below its highest since January 3rd 2019.
By comparison to today's near 21-week high interbank exchange rate, back on February 28th, the US dollar was as weak as 0.7509 versus sterling. So since then, the dollar exchange rate has risen by over +4 cents, or by +5.55%.
To contextualise the buck's gains versus the British pound in monetary terms, at today's interbank exchange rate of 0.7926, US$250,000 would be worth £198,150.
By comparison, at the interbank exchange rate on February 28th of 0.7509, US$250,000 would have been worth just £187,725.
So for the same US dollar amount, that's a rise in the sterling total of +£10,425.
This might be useful to you when you transfer money to the UK from the USA. This is because, when you exchange US dollars for British sterling, you might now get a notably higher pound total, compared to if you'd transferred money earlier this year.
You can keep up with the latest movements in the US dollar vs pound interbank exchange rate on Pure FX's USD to GBP Exchange Rate Updates page.
Alternatively, you can see today's US dollar to pound interbank exchange rate, and how it's moved in the past seven days, on our Rates & Tools page too.
A first reason why the greenback has neared this 21-week high versus the pound is because the Conservative Party looks closer to supporting a "No Deal" Brexit, following its losses at the European Parliament elections last weekend.
That said, looking forward, the US dollar vs pound exchange rate could be affected by the fact that ex-Former Secretary Boris Johnson is due to appear in court, accused of lying about Brexit.
In addition, the opposition Labour Party now looks closer to officially supporting a second Brexit referendum.
Let's look more closely at these factors that have contributed to lift the US dollar exchange rate versus sterling near this 21-week high. This might help you to decide when to transfer money abroad from the USA this year.
US Dollar Gains Versus Pound, as Tories Closer to Favouring "No Deal" Brexit
A first partial explanation why the US dollar to pound sterling interbank exchange rate has neared this 21-week high is because the UK's Conservative Party now looks closer to supporting a "No Deal" Brexit.
In part, this is because the Tories suffered heavy losses at last weekend's European Parliament elections, as voters instead favoured Nigel Farage's new Brexit Party.
To be specific, the Tories won just 4 MEPs at last weekend's vote. This was the Conservatives' worst electoral performance in almost two hundred years, since 1832.
As a result, in the forthcoming Tory leadership contest to replace Prime Minister Theresa May, a growing number of candidates now say that they'd favour a "No Deal" Brexit, to take the UK out of the EU as fast as possible.
For example, ex-Foreign Secretary and Mayor of London Boris Johnson announced his leadership candidacy recently, saying that he'd take the UK out of Europe "with or without a deal", according to The Financial Times.
In addition, last weekend former Brexit Secretary and leadership candidate Dominic Raab said that the Tories must show "unflinching resolve" to "get on and leave the EU", even without a deal, reports the BBC.
These Tory leadership candidates want to look as pro-Brexit as possible, to win the support of Conservative members, who strongly favour the UK exiting the EU as quickly as we can.
Also, these potential Conservative leaders such as Mr. Johnson and Mr. Raab hope to win back votes from the Brexit Party, to ensure the Tories perform strongly at the next general election.
However, both the financial markets and British businesses are fearful of the possibility of a "No Deal" Brexit. This is because we'd be cutting trade ties with our closest export partner, and have to deal with lots of new tariffs and bureaucracy to send goods to Europe.
This might slow the UK's future economic growth, so this risk has weakened the British pound.
Boris Johnson to Appear in Court, Might Affect US Dollar Vs Pound
Meanwhile, looking forward, a factor that might affect the value of the US dollar against sterling is the fact that ex-Foreign Secretary Boris Johnson has been summoned to court.
In particular, Mr. Johnson has been accused of misconduct in office, for telling voters during the EU referendum campaign that we'd save £350 million a week to give to the NHS, if we exit the EU, reports CNN.
Yesterday, Westminster Magistrates' Court's District Judge Margot Coleman issue a written ruling that says: "I am satisfied that this is a proper case to issue the summons as requested for the three offences as drafted.”
“This means the proposed defendant will be required to attend this court for a preliminary hearing, and the case will then be sent to the Crown Court for trial."
This might affect the US dollar vs British sterling, because Mr. Johnson is the leading candidate in the Conservatives' upcoming contest to replace Theresa May as Prime Minister.
If Mr. Johnson is found guilty of lying during the EU referendum, this might affect his candidacy. Also, it could lower the possibility that the UK exits the EU without a deal in the coming months.
US Dollar to Pound Rate May Be Influenced if Labour Backs Second Referendum
In addition, looking ahead, another factor that could influence the value of the US dollar versus the pound is the growing possibility that the opposition Labour Party may soon announce its official support for a second Brexit referendum.
Labour might do this, to compensate for its electoral losses at last weekend's European Parliament vote.
To be specific, at last weekend's vote, Labour won just 10 MEPs. This is because the pro-Remain voters who favoured Labour at 2017's general election abandoned the party, given its ambiguous Brexit stance.
Instead, these pro-Remain voters favoured the Liberal Democrats and the Greens, who clearly campaigned for the UK to stay in the EU.
To make up for these losses, the Labour Party now looks set to switch its stance, to officially support a second referendum.
In particular, Shadow Chancellor John McDonnell said in an interview with Sky News this week that: "Our only option now is go back to the people in a referendum, and I think that's the position we're in now."
If Labour switches its stance, this lifts the possibility that the UK might stay in the EU, if there's a general election and Jeremy Corbyn's party wins. In turn, the UK would retain its close trade ties with Europe, including tariff and bureaucracy-free imports and exports.
This might favour the UK's future GDP (Gross Domestic Product) expansion, so may affect the British pound too.
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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email firstname.lastname@example.org.