Yahoo Finance GBP/USD Daily Fundamental Forecast – November 23, 2017
The GBPUSD pair has been boosted more by the dollar following the FOMC minutes than by the pound gaining in strength. The budget announcement and the economic forecast for the UK that came in had little effect on the pound and it was left to the weakness of the dollar to help the GBPUSD pair to move higher.
GBPUSD Moves Through 1.33
We had expected the day to be a highly volatile one for the pound as it was likely to be hit both by the budget announcement in the UK and also the FOMC minutes in the US later in the day. It did turn out to be so, to an extent, as the GBPUSD pair fell towards the 1.3220 region during the London session following the headlines associated with the UK budget but once the details began to flow in, the tide turned. The budget did announce a large amount of borrowing which weakened the pound initially but it also lowered trend productivity which helped the pair to turnaround and move higher through the 1.3250 region.
The pound continued to hold steady till the release of the FOMC minutes which said that most of the Fed members favored a December rate hike but were not so sure about the following hikes next year. There was still some concern about the inflation and as usual, the Fed said that they would wait and see incoming data before deciding on further rate hikes. The market sought to focus on the dovishness in the text which weakened the dollar and it helped the GBPUSD to zoom past 1.33 and it trades comfortably above that region as of this writing and looks good to move ahead towards the 1.34 region in the short term.
Looking ahead to the rest of the day, we have the second GDP estimate from the UK and it is also the beginning of the long Thanksgiving weekend in the US. This would mean that the liquidity is likely to dry up and the volatility is also likely to be low. So do not be surprised to see some boring consolidation for the rest of the day.
This article was originally posted on FX Empire
