GBP/USD: Brexit weighs and Fed's Dudley sparks March risks for a Fed hike

Currently, GBP/USD is trading at 1.2324, down -0.69% on the day, having posted a daily high at 1.2413 and low at 1.2281.

Brexit battle lines drawn as UK readies divorce papers - Reuters

GBP/USD is on the back foot on Brexit concerns and a resurgence of the dollar. In respect of UK data, we got a stronger-than-expected Feb House price data from the “Nationwide” lender (+0.6%), on expectations consumer credit data for Jan (+GBP1.4bn) but weaker than expected Feb manufacturing PMI (54.6 versus 55.8 expected and 55.7 in Dec), as explained by analysts at Scotiabank, adding:

"Uninspiring data and broader strength in the USD leave the UK a relative under-performer on the day. We think Brexit risks and uncertainties remain a potential drag on the GBP and expect Cable to retest the 1.20 area in the next few weeks as the process moves towards a formal exit from the EU".  Meanwhile, the US dollar is firm on the back of Fed Dudley's recent remarks that March is a likely timeslot for a Fed hike and the market has priced it in. 

GBP/USD levels

The analysts at Scotiabank explained that GBP/USD short-term technicals are bearish and how Cable has dropped out of the low end of the Feb consolidation range. "After trading consistently between 1.2385/1.2580 through last month, weakness implies immediate risk to the 1.2180/85 area", they think. Meanwhile, the outlook is technically bearish below the 4hr 20 and 50 smas clustered below 1.2480.
 

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.