GBP/USD Daily Fundamental Forecast – November 14, 2017

The pound turned out to be the weakest currency yesterday as the currency was hit hard by the domestic and the international issues that the UK has been facing over the last few weeks. It remains to be seen how these issues pan out during the course of the next couple of weeks to see if the currency is able to get itself out of the rut. The GBPUSD pair found some support in the 1.3060 region once again and has since bounced in a strong manner.

GBPUSD On the Backfoot

The UK PM May has been forced to battle on 2 fronts as the Brexit process and domestic issues have been forcing her into the backfoot over the last couple of weeks. Her support within her own party has been dwindling over the last few weeks with reports over the weekend suggesting that around 40 of her own MPs want her to step down. This has led to a lot of confusion and uncertainty over the survival of her government in the short and medium term as well.

Any kind of uncertainty is not good for the pound and the domestic issues has also begun to have an effect on the Brexit talks as well. The talks have had little progress over the last few months and with her survival under question now, it is only going to make things further difficult for any kind of progress in the talks. This has placed the UK on the backfoot in the talks and certainly they would not want to negotiate in a position of weakness as they are now.

Looking ahead to the rest of the day, we have the PPI data and we also have speeches from Carney and Yellen as well and this is likely to bring in a lot of volatility in the markets. We also have the CPI data from the UK which is also going to be viewed with renewed interest as the UK economy has been under pressure and this is being reflected in the incoming data over the last couple of months. Any kind of strength in the data would be most welcome and should see the GBPUSD pair moving higher.