The GBP/USD pair started the new week with GBP bulls struggling to hold above 1.3550 as we head into the London open on Monday.
That said, the current trading sentiment highlights the renewed dollar strength ahead of some key preliminary PMI data releases for January in both the UK and US. Meanwhile, the uncertainty trailing this pair also comes from growing expectations of a hawkish Fed stance at the Federal Open Market Committee (FOMC) meeting on Wednesday.
Furthermore, UK Prime Minister Boris Johnson’s political woes continue amid investigations over accusations that he held a “booze” party during the lockdown in Britain. Commenting on this matter, Bloomberg noted that: “Johnson would face a confidence vote on his leadership if 54 Tory MPs, or 15% of the total in the House of Commons, submit letters to a key committee calling for him to resign.”
In other news, The Guardian highlighted Great Britain’s citizens’ hardship in the Eurozone, opining: “Thousands of people say their rights have been compromised despite government promises.” The online newspaper company also mentioned: “Two major ports in Wales saw trade plummet by 30 percent in 2021 as a result of post-Brexit changes in the way freight is moved, a ferry operator has said.”
On coronavirus, the UK has recorded a halving in daily cases over the last two weeks, with the latest update on Saturday showing that daily infections came in at 76,807, down by 54% from 176,191 cases reported two weeks ago.
GBP/USD Bulls React to Growing Geopolitical Sentiments
Meanwhile, the US State Department and UK Deputy Prime Minister Dominic Raab have issued warnings over Russia’s plans to invade Ukraine. This amplified geopolitical fears for GBP/USD bulls, indicating that more downsides could follow if the sentiment remains.
Finally, a downbeat UK Retail Sales data on Friday, which contrasts with expectations of a hawkish Fed stance, also added to the bearish pressure currently trailing the Cable pair.
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