GBP/USD Fights 1.1200 During Dollar Retracement, United Kingdom Political Crisis

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GBP/USD stays weak for three consecutive days today and falls lower to the floor of its trading limit. Also, this is happening despite a moderate fall in the USD. Furthermore, United Kingdom’s political issue is serving as an impedance to the pound, thus restricting the spot price under 1.1200. This happened throughout the first part of the European trading period.

The most recent happenings affecting the GBP/USD are emerging from anxiety concerning a more serious economic slowdown. Consequently, this may push the BOE to cultivate a steady approach toward increasing interest rates, without minding inflation. Frankly, the data published yesterday (Wednesday) revealed that the United Kingdom CPI rose to a new four decades height in the last month (September). However, this may keep undermining the GBP. At the same time, the USD is properly aided by anticipations that additional hawkish moves will be made by the Federal Reserve.

GBP/USD Fights 1.1200 During Dollar Retracement, United Kingdom Political Crisis

More Details About GBP/USD Price Dynamics

Furthermore, these anticipations were confirmed by the latest hawkish comments of the Federal Reserve officials. These officials re-echoed that the United States Apex bank is dedicated to a more violent fight against rising inflation prices. Subsequently, this pushes the yield on the interest rate reactive two years United States government bond to a decade-and-a-half height. Also, the standard ten years treasury note rose to its most elevated peak since the financial malady that occurred fourteen years ago (2008). Besides, this impending recession risks may keep offering some assistance to the USD. Consequently, this background stands in favor of bearish traders who believe that the GBP/USD pair will trend downwards.

There is no key market-influencing data coming from the United Kingdom today, while the United States economic documents show the Philly Fed production index. Another US data is the initial unemployment claims, as well as the Home Sales data. All the previously mentioned data combined with the influential FOMC members and the United State bond produces, will propel the request for the USD and give direction to the GBP/USD. Additionally, buyers and sellers will get more information from the wider market risk feeling before the United Kingdom monthly Retail Sales numbers tomorrow (Friday).

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.