GBP/USD Daily Fundamental Forecast

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GBP/USD Daily Fundamental Forecast – December 20, 2017

Colin First

Updated Tue, Dec 19, 2017, 8:34 PM

The GBPUSD pair also rose against the dollar as the dollar got hit across the board despite the smooth passage of the tax bill so far. The tax bill passage was expected to give a boost to the dollar but so far, the effect of that has been completely the opposite and it remains to be seen how the market would react once the bill is fully passed through.

GBPUSD Looks Solid

The bill has passed through one of the Houses in the US and is waiting to be passed through the Senate. There is a delay in its passage through the Senate due to some procedural issues and it is quite possible that this delay is putting some pressure on the dollar and leading to some uncertainty. The bill is expected to pass through the Senate, though on a very tight margin and then it needs to be signed into law by the President. All of this is expected to be completed by this week and so the volatility in the dollar should continue till that time.

There has not been much developments in the Brexit process over this week and it is likely that we are going to see more on that only in the New Year. We are definitely seeing some solid progress in the process and with the leaders on both sides making it clear that they are looking to push through a deal, it is going to be only a matter of time before the deal comes through and it is this notion that has been supportive of the pound over the last few weeks.

Looking ahead to the rest of the day, we have a speech from the BOE Governor Carney but its impact on the markets is expected to be minimal. The moves in the market today are likely to continue to be driven by the dollar and the tax bill passage and we continue to believe that the dollar should strengthen in the short and medium term which should keep the GBPUSD pair busy.

This article was originally posted on FX Empire