GBP/USD hovers above annual lows close to 1.3300 ahead of French fishermen blockades on Friday


  • GBP/USD has tentatively bounced from annual lows at 1.3300 ahead of a short market closure for Thanksgiving.
  • Markets have been keeping one eye on Brexit developments, with French fishermen port/tunnel blockades now expected.
  • While the pair has been under heavy selling pressure recently, it isn't yet in oversold territory.

Ahead of a five-hour FX market closure lasting between 1800GMT and 2300GMT due to the Thanksgiving holiday in the US, GBP/USD is trying to tentatively regain some composure. The pair had hit fresh annual lows just to the north of the 1.3300 level earlier on during Thursday’s session but has since bounced to the 1.3320s.

On the day, the pair is now flat. The tone of Brexit developments seems to be tacking a tone for the worse again. A UK government spokesperson on Wednesday evening said that the UK PM had told the Irish PM that he was concerned about a substantial gap that remained between the UK and EU on the implementation of the Northern Ireland Protocol.

Meanwhile, the French Fishing Association Body was scathing of the UK on Thursday, saying that they had still not got what they wanted regarding licenses. The body said that French fishermen would be taking action on Friday to block French ports and the Channel tunnel. The blockades will disrupt UK/EU trade and are likely to exacerbate the supply chain disruptions already plaguing the UK economy.

Data from the ONS released earlier in the morning showed that 14% of businesses in the UK had reported a shortage of workers in late November. Further evidence of a strong UK labour market likely increases the chances that the BoE will hike interest rates by 15bps to 0.25% next month and this might be helping to negate the impact of negative Brexit newsflow for GBP.

But UK money markets don’t seem to have viewed the ONS data this way. Three-month sterling LIBOR futures for December 2021 (a proxy of the market’s expectations of the BoE’s Bank Rate next month) rose to their highest since late September on Thursday at 99.820, up from 99.765 at the start of the week. That implies markets only anticipate about 8bps of rate hikes next month, or are only pricing slightly above a 50% chance that the bank will hike rates.

Sterling losses have further to run

If the BoE does disappoint expectations next month by refusing once again to hike interest rates, then GBP will see a negative reaction as hawkish bets are unwound. Though GBP/USD has come under heavy selling pressure in recent weeks and is down 2.6% on the month, the pair isn't yet in oversold territory.

Its 14-day Relative Strength Index score is 33.3, above the oversold 30 mark, while its Z-score to its 200DMA (the number of standard deviations away) is at -2.61. In the last five years, the GBP/USD’s Z-score has only been under -2.50 on two occasions and on both those occasions it needed to fall under -3.0 before GBP/USD rebounded.

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.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD eases towards 1.1300 as yields pause south-run

EUR/USD is easing towards 1.1300, having faced rejection just shy of 1.1350. The recovery in the risk sentiment pauses the Treasury yields’ south-run, underpinning the US dollar. Fedspeak, US Jobless Claims, Omicron updates in focus ahead of Friday’s US NFP.

EUR/USD News

GBP/USD drops back below 1.3300 as USD rebounds

GBP/USD is trading below 1.3300, paring back gains amid resurgent US dollar demand. The greenback rebounds with yields on Fed’s hawkish view. Concerns over the Omicron covid variant and Brexit issues continue to limit the pair’s upside. US data awaited amid a light UK docket.

GBP/USD News

Gold struggles near one-month low, around $1,770 region

The Fed's hawkish outlook prompted fresh selling around gold on Thursday. A stronger USD offset Omicron fears and further weighed on the commodity. The technical set-up supports prospects for a slide to November swing low.

Gold News

Shiba Inu price edges closer to another 50% upswing

Shiba Inu price looks ready for a reversal as it enters a crucial support area that is likely to trigger a massive uptrend. This move has a high chance of occurrence as it allows sidelined buyers who missed the initial run-up to get in on the next leg-up.

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures