GBP/USD Daily Fundamental Forecast – September 28, 2017

The GBPUSD pair moved down during the course of the trading yesterday as the pound joined a bunch of other currencies that have been suffering from the rebound in the dollar over the last few days. With ample support from the Fed, the dollar has been looking to turn things around and what seemed a lost cause till about a week back has now turned into a full fledged rebound in the markets.

GBPUSD Under Pressure From Dollar

There were clear signs of this turn around in the dollar even a couple of weeks back as the pound and other currencies struggled to sustain their gains against the dollar. The dollar had also started to show some clear signs of being oversold and hence the traders needed to have been aware of this rebound. Though the rebound has assumed high proportions, it remains to be seen whether the dollar will be able to sustain this move. The Fed had made it clear that the next rate hike would be on the table only if the incoming data continues to improve.

There are also a few Fed members who still believe that the US could go slow on its rate hikes as the inflation is still below target. This places a lot of onus on the incoming data and with the data being choppy of late, it has become difficult to predict. So, the rate hike towards the end of the year is still not a done deal and with the pound showing some strength of its own over the last couple of weeks, with the Brexit process going on as planned, the dollar is not yet out of the woods.

Looking ahead to the rest of the day, we have a speech from May later in the day and we also have the Final GDP data from the US as well. These events could bring in some volatility in the pair and we expect a bounce in the GBPUSD pair in the short term.