- No-deal Brexit fear keeps weighing on the GBP/USD pair.
- The UK-Iran drama may get bitter as Britain recently deployed few more ships to Bahrain.
GBP/USD recovers from April 2017 bottom as it trades near 1.2370 ahead of the London open on Monday.
The quote has been on a southward trajectory as odds of a no-deal Brexit boosted after the hard Brexiteer Boris Johnson recently became the UK’s Prime Minister. Mr. Johnson reshuffled the cabinet with the key characteristic of the newly arrived lawmakers being their preference to leave the bloc by October 31, with or without a deal. Some of his policymakers, like Finance Minister Sajid Javid, have started announcing hefty packages to safeguard against the no-deal Brexit.
The European Union (EU), however, has less preference for the hard Brexit but shown no readiness to re-open the previous deal, which in turn increases the chances of a disorderly exit.
The UK’s Confederation of Business Industries (CBI) has recently published a piece showing fewer prospects of a soft Brexit unless the EU runs faster for it, which seems absent off-late.
On the other hand, the US trade delegation will negotiate the much-awaited deal after a three-month halt in Beijing. While the 2-day-long talks, to start from Tuesday, are less likely to deliver any breakthrough, traders will seek clues as to how much both the nations have changed so far as their attitudes in trade conditions are concerned.
Also important is the monetary policy meeting by the US Federal Open Market Committee (FOMC). The US central bank is widely expected to announce a 0.25% rate cut, the first in more than a decade.
Further to note is Britain’s additional troop deployment in Bahrain to protect ships in the Gulf of Hormuz. The same has been highly criticized by Iran during the latest meeting in Vienna.
It should also be noted that the UK PM Johnson will visit Scotland, to get the support for his Brexit policies, during today.
In addition to trade/political headlines, the UK’s Consumer Credit, Mortgage Approvals and M4 Money Supply could entertain the traders ahead of offering the US Dallas Fed Manufacturing Index details.
Forecasts suggest an improvement in Britain’s June month Consumer Credit and Mortgage Approvals to £0.967B and 65.990K from £0.822B and 65.409K respectively. Though, June month money supply is likely being lesser, to -0.5% versus -0.1%. Furthermore, the US Dallas Fed Manufacturing Index (July) could improve to -5.1 from -12.1.
Technical Analysis
Sustained trading below 1.2360 might not refrain from dragging the quote to 1.2310 and 1.2200 whereas 1.2375 and July 23 low around 1.2420 may limit immediate upside.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.