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GBP/USD Plummets as UK Political Concerns Worsen

Yesterday’s high: $1.3134

Yesterday’s low: $1.3065

US Dollar Benefits from Weak Pound

Despite concerns relating to US tax reform, the US Dollar advanced against a weak Pound yesterday.

Investors sold the Pound on Monday in reaction to a report from The Sunday Times that indicated 40 Conservative MPs were prepared to sign a letter of no confidence in UK Prime Minister Theresa May.

With May’s domestic position less-than-stable since the snap general election earlier in the year, Pound traders are concerned that this could have a negative effect on the Brexit process.

USD Outlook: UK Inflation Stats in Focus

The Pound could be influenced on Tuesday by Britain’s upcoming Consumer Price Index (CPI) data. If UK inflation beat expectations in October, it could cause speculation that the Bank of England (BoE) may be pressured into tightening monetary policy again sometime in 2018.

However, potential political developments are likely to have an even stronger impact on Pound movement.

As for the US Dollar, it’s unlikely to see much shift in direction in the coming sessions unless there are developments in US tax reform, or unless Wednesday’s US inflation data comes in well below expectations. Poor US inflation could dent the Federal Reserve interest rate outlook.

Key Events

14th November

09:30 UK Inflation Rate

13:30 US PPI

15th November

09:30 UK Job Market Report

09:30 UK Jobless Claims

13:30 US Inflation Rate

13:30 US Retail Sales

15:00 US Business Inventories

16th November

09:30 UK Retail Sales

13:30 US Jobless Claims

13:30 US Manufacturing and Industrial Production

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

Arron Morris

Senior Currency Broker
T: 01442 892 065

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