GBP/USD Daily Fundamental Forecast – March 03, 2017

The GBPUSD pair has been chewing on its losses for the past 24 hours, not sure and not knowing what else it needs to do to reverse the trend and to move higher. The pound has been under a lot of pressure this week. The Brexit process continues to hang over its head like a sword and still, things are not very clear on how the negotiations are going to go when the Euro and the UK leaders sit down for talks. We are getting closer and closer to the day when Article 50 is going to be invoked and once that is done, there is no going back.

GBPUSD Likely to Remain Under Pressure

If this pressure was not enough, there is further cause for concern in the UK as the Scots are planning on having another referendum for independence, if rumors are to be believed. Though there has not been much follow through on this rumor since the weekend, the rumors are not likely to die down any soon. And to top it all off, we have the dollar going from strength to strength since the start of the week, putting the GBPUSD pair under a lot of pressure.

The main reason for the dollar strength is that the markets are beginning to become more and more comfortable with what Trump and his team are doing and as the uncertainty slowly fades, the dollar becomes stronger. Also, the Fed members have been hinting a rate hike in March and this has got the dollar bulls interested as well.

Looking ahead to today, the GBPUSD pair is likely to remain under pressure. We have the services PMI from the UK but what will be the biggie for the day is the speech from Yellen in the middle of the US session. This is likely to be closely watched for hints on when the rate hikes are going to be and if Yellen more or less confirms a March rate hike, we should see another bout of dollar strength which will push the GBPUSD pair towards 1.2200.