GBP/USD Daily Fundamental Forecast – November 21, 2017
The pound whipsawed a little bit during the course of the day but ended the day largely unchanged as it seems to be little affected by the happenings in Germany. The UK has it own political and economic issues to deal with and hence we believe that the pound would be swayed here and there more by the issues that the UK has to deal with rather than anything that is going on in the Eurozone.
GBPUSD Stays Rock Solid
The pound is likely to get a short term and small benefit due to the issues in Germany as this is likely to weaken the position of the German and the Eurozone leaders in their talks on Brexit and this could give some temporary relief for the UK PM May and her team. But whatever little benefit that they can get out of this is likely to be short lived as the process is too far down and it is unlikely that either side is going to budge too much from their prepared positions due to domestic issues in their respective countries.
This is something that the markets have probably realised and that is the reason why, after an initial wobble, the pound has adjusted itself to the reality and ends the day almost unchanged. The UK economic data continues to remain choppy and this is likely to be a cause for concern for the BOE. Also, the UK PM May also continues to struggle to deal with her political troubles which have given her little time to focus on Brexit. With the issues in Germany, the process is only going to get more complicated and time-consuming and this is not good for either side.
Looking ahead to the rest of the day, we do not have any major news from the US but we have the inflation report hearings from the UK and this is likely to be watched closely to see how the economy and the inflation is doing which is likely to have a large say on when the next rate hike is going to be.
This article was originally posted on FX Empire