GBP/USD on the back foot, focus on UK politics, GDP
- GBP/USD seesaws near three-week low as odds of no-deal Brexit increase.
- UK PM signals preparedness to disobey Benn Bill, facing challenges over conflict of interest when he was London Mayor.
- Tory conference supports PM Johnson’s get Brexit done theory, remainers trying to push PM towards following the Brexit delay bill.
With the increasing odds of no-deal Brexit, the GBP/USD pair stays on the back foot near three week low while taking rounds to 1.2290 ahead of the London open on Monday.
Not only the United Kingdom (UK) Prime Minister (PM) Boris Johnson’s readiness to avoid the Benn Bill, which pushes the Tory leader to extend Brexit beyond October 31, but comments favoring timely Brexit from the key British personalities like Michael Gove, Jacob Rees-Mogg and Steve Barclay also exert downside pressure on the GBP/USD pair. As per the BBC, the trio reiterated the PM’s message of Brexit at the start of the Conservative annual conference that will last till October 02.
Elsewhere, the Tory leader is under pressure amid allegation of mishandling public funds while being the London Mayor. Additionally, the opponents of Brexit, popularly known as remainers, are under process to form a cross-party alliance to push the PM towards following the Benn Bill in all cases.
On the other hand, the US Dollar (USD) stays positive amid safe-haven demand while also ignoring pessimism surrounding the case against US President Donald Trump and the US-China trade tussle.
While Brexit headlines will keep directing near-term Cable moves, with recent report from the Guardian stating pessimism of Germany’s parliamentary state secretary to the interior minister, final reading of the second quarter (Q2) Gross Domestic Product (GDP) from the UK and the Chicago Purchasing Mangers’ Index (PMI) for September from the United States (US) could decorate today’s economic calendar.
Forecasts suggest, the British GDP to recover to 0.5% from -0.2% initial estimate while the US manufacturing gauge may improve to 50.5 from 50.4.
Technical Analysis
The 50-day simple moving average (SMA) near 1.2260 acts as immediate support holding the key to pair’s further declines to 1.2180 while an upside break above 21-day SMA level of 1.2355 could recall 1.2400 on the chart.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
