The pound closed weaker for the day on Friday as the dollar continued to gain in strength across the board and this cancelled out any kind of strength that could be seen in the pound during the day. But the pound has started the week on a strong note today and it remains to be seen whether it can keep up the momentum during the course of this week.
GBPUSD Looks to Strengthen
The dollar was buoyed by some strong incoming data in the form of NFP. The dollar had managed to retain strength and stay steady over the last week as the incoming data had continued to remain strong and exceeding expectations and this increased the prospects of quicker rate hikes from the Fed in December. The NFP data came in stronger than expected and though this did not give rise to violent moves after the data, it did lead to some underlying strength in the dollar which helped the dollar.
The Fed had made it clear that rate hikes in 2018 would be dependent on the incoming data and with the change in Fed Chief, the market needed something to reassure itself that all was good with the dollar. The strong incoming data helped to serve that purpose and this led the GBPUSD pair lower during the day on Friday as it closed just below 1.3400. But today, the pound has grown stronger as the prospects of a Brexit deal continue to improve and if and when that happens, the pound is expected to get a big boost.
Looking ahead to the rest of the day, we do not have any major news from the US or the UK for the day but there are a host of events and data for the rest of the week which should keep the pair very volatile. Added to this, if a Brexit deal is announced, then that would add even more volatility to the markets.
This article was originally posted on FX Empire