Last week’s events in UK parliament saw the pair bounce back to such highs, following a slight drop-off towards the end of February, which has seen cable rates gain by over 2% in the last month.

Currency Pair% Change in 1 monthDifference on £200,000
GBPUSD2.68%$6,960
Market’s struggling to price the dollar

Will GBP/USD remain above 1.32?

Towards the end of last year, comments from analysts at US investments bank Morgan Stanley, suggested that there were early signs of a US economic slowdown and at the beginning of this year claimed that GBP was “cheap” by historical standards, which has fuelled speculation that cable rates could see gains throughout the year.

Following positive US economic data towards the start of the year, it appeared that signs of a slowdown had been quashed, however there are now surfacing reports that argue otherwise, following the drop-off in inflation seen last week and the recent sharp fall in job creation, largely influenced by the partial government shutdown.

In a recent Bloomberg interview, Michala Marcussen, the chief economist at French Investment Bank Société Generale also claimed the US could be due a drop off in economic growth in 2020 and if such reports are to be believed, we could see currency markets respond accordingly and begin to price in a weaker USD.

Fed Interest rate decision this week

A key event this week that will be capturing investor attention is the meeting of the US Federal Reserve on Wednesday, as the latest interest rate decision will be announced.

Despite 4 hikes to rates in 2018, the Fed are not expected to announce any change to the current level of 2.5% as it sits at the upper threshold of the target range set last year and according recent reports have signalled they will patient when considering future changes, in light of the recent drop-off in inflation and slower economic growth.

Towards the end of the week, there will be the latest Jobless and industry Purchasing Manager Index (PMI) data, which will provide indications surrounding the health of identified industry sectors and could influence movement for the GBP/USD pairing.

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