GBP/USD Daily Fundamental Forecast – November 13, 2017

The GBPUSD pair has been having a pretty tough time over the last week or so with the pair chopping around on either side of 1.31 over the last week with no specific direction. On Friday, we saw the pair gain on some dollar weakness but that has been reversed as of this morning and we are now seeing the pound on the backfoot as of today morning and it is only likely to get worse for the pound.

GBPUSD Hit By Political Woes

On Friday, we had news that the tax cut plan for the corporates would be delayed by a year. This was seen as a setback for Trump and his team and also for the dollar as the corporates were looking to make full use of the tax cut this year. This dollar weakness helped the GBPUSD pair move up through the 1.32 region for a brief while before closing the week below 1.32 and looking ominous for more gains this week.

But those hopes were doused over the weekend as reports emerged that the UK PM May is likely to face another battle to retain her position within her own party. The reports said that more than 40 MPs from her own party would like to see her go and this has brought on a lot of pressure on her government. She has already been criticised for the slow progress in the Brexit talks which have reached a stalemate and this is only going to make matter worse for her and her team and weaken her position considerably. This has hit the pound hard as of this morning and has led the pound to drop by around 100 pips as of this morning.

We believe that this pressure on the pound is only going to get worse as time goes on and we are likely to see this continue for the rest of the day. Looking ahead to the day, we do not have any major economic news from either the UK or the US for the day and hence we are likely to see the weakness continue which should bring the support region around 1.3060 into the picture for today.