Yesterday’s high: $1.3173
Yesterday’s low: $1.3089
Pound Unable to Hold its Gains against US Dollar
Despite a lack of strong US data in recent sessions, investors are optimistic enough about US tax reform and the Federal Reserve outlook that the US Dollar was able to recover against a weaker Pound on Wednesday.
Sterling was sold from its weekly highs against the ‘Greenback’ due to rising concerns about clashes and scandals within UK Prime Minister Theresa May’s Conservative Party. Investors are anxious that if any more cabinet ministers lose their roles, it could undermine May’s position in Brexit negotiations and limit the chances of a strong UK-EU trade deal.
USD Outlook: Brexit Negotiations in Focus
UK and EU negotiating teams will head back to Brussels in the coming days for another round of Brexit negotiations, which are likely to be the primary focus of GBP/USD traders towards the end of the week.
Any signs that negotiations are speeding up and that the second phase of talks could begin in the coming months would likely lead to a surge in demand for the Pound, as hopes would rise of a UK-EU trade deal.
However, if negotiations appear unable to advance past a perceived ‘deadlock’, the Pound will see weaker performance.
The US Dollar could be influenced towards the end of the week by US jobless claim data and a Michigan consumer sentiment report – as well as any potential developments in US tax reforms.
13:30 US Jobless Claims
15:30 US Wholesale Inventories
09:30 UK Balance of Trade
09:30 UK Manufacturing and Industrial Production
09:30 UK Construction Output
15:00 US Michigan Consumer Sentiment
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