GBPUSD has started off the week fairly muted as investors wait to see what happens this week as Prime Minister Theresa May faces the House of Commons. Over the weekend we saw the EU Brexit Summit close with some positive news that the members attending had unanimously agreed on the proposal. However the markets are still apprehensive over the proposal passing through Parliament, this is the reason GBPUSD remained under pressure yesterday.
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The GBPUSD pairing is likely to be influenced by Brexit this week, however there will be opportunities from both sides for clients with a requirement. After the Bank Holiday in America on Friday, US markets are patiently waiting to see if the US equity market will recover after the slump yesterday, with key speeches this week from Vice Chair Clarida tomorrow and the Fed Chair Powell on Thursday.
Speeches generally have the ability to influence the currency in question, with questions about US fiscal policy and whether the interest rate plan will continue on such an aggressive path next year. With GBP under pressure from domestic political struggles, clients buying USD with GBP may find it slightly cheaper to do so around these speeches.
Furthermore, the US economy has key data releases this week too. Starting tomorrow, influential Gross Domestic Product Data is released, inflation data on Thursday and Purchasing Managers Index Data later in the week.
Whilst this data is likely to bring movement on rates – the key releases will come from the UK side as the economic implications for Brexit are considered by the Monetary Policy Committee. Mark Carney will be delivering a speech on Wednesday, outlining how this will affect UK PLC in the years ahead – this has the ability to be extremely influential on GBPUSD so keep an eye on this event this week.
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