GBP/USD Fundamental Analysis: March 14, 2017
Although the UK economy saw a lot of events and developments during yesterday’s trading session, this has done practically nothing to induce added activity into the GBP/USD pair. A slight bounce occurred in the pair during the previous session but this was automatically met with a selloff, especially since the bounce was somewhat thin and was unable to hold on and prevent the said selloff from occurring. The GBP/USD pair has however managed to surpass 1.2200 points and even managed to reach 1.2250 following market rumors that Theresa May might not be invoking Article 50 within the week. However, since there was no actual confirmation that the invocation would indeed be happening this week, the market became initially confused on the British pound’s rally and the lack of basis to this particular assumption has caused this bounce to eventually die out.
In addition, there have been rumors swirling around that the British government might not accept Scotland’s request to hold an independence referendum, especially since the UK is already neck-deep in uncertainties and another referendum would only cause more disaster for the country’s economy. These series of events has caused the GBP/USD pair to retreat towards 1.2200, where it is currently trading.
For today’s trading session, there are no expected data releases from the UK economy, while the US economy will be releasing its PPI data. However, all eyes will be on the FOMC rate announcement which is set to be released tomorrow. This, in addition to the impending invocation of Article 50, are both expected to keep the GBP/USD pair under pressure in the short term.
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