GBP/USD Daily Fundamental Forecast – October 13, 2017

The GBPUSD pair continues to trade in an up and down manner with no specific direction but the fact that the dollar is on the backfoot has been helping the pair to stay buoyed during this period. The pound continues to suffer from uncertainty surrounding the Brexit process but so far, the weakness in the dollar has been so overwhelming that it has been able to join others in moving up against the dollar.

GBPUSD Under Pressure

The Brexit talks have been proceeding for a few months now but so far, there has not been any major breakthrough. The stalemate in the talks continue and several rounds of talks have not yielded any significant results so far. This has led to the question on whether the Brexit talks would indeed break down and whether the UK would break away from the Eurozone without any specific deal being done. This is a real possibility at this point of time and this has caused a lot of uncertainty.

Also, the position of the UK PM May has also been in danger over the last few weeks as many in her party have started to revolt against her leadership style. Though she has managed to overcome all these troubles so far, it remains to be seen how long she would be able to manage to do so. A combination of these events have placed the pound under pressure and only the weakness in the dollar has given it some respectability so far.

Looking ahead to the rest of the day, we have the CPI data and retail sales data from the US while we do not have any major data from the UK as such. These pieces of data would be watched very closely by the traders as inflation is one of the main parameters that the Fed is likely to consider when they sit down to decide whether they want to hike rates in December. If the data comes in strong, expect the pair to weaken further.