Yahoo Finance GBP/USD Daily Fundamental Forecast – November 20, 2017
The pound continues to trade in a steady manner in contrast to the euro which has been rocked this morning by the news of the failure of the German coalition talks. The pound has made use of the weakness in the dollar so far and has managed to move higher to trade just below the 1.32 region as of this writing but it remains to be seen whether it can push any higher.
GBPUSD Stays Steady
The pound is likely to be affected by the happenings in Germany and the rest of the Eurozone as the Brexit talks continue to progress. As the UK PM May might be silently enjoying the predicament of Merkel in Germany, as she battles the issues within her own party in the UK, it has to be remembered that any uncertainty or confusion in Germany could seriously jeopardise the Brexit talks and that is not good either for Germany or for the UK as well. Both the sides would want the talks to progress smoothly and end up in an agreement that would benefit both sides.
This uncertainty in Germany could delay the talks and the hopes of reaching an agreement would only move further away and this is unlikely to be good for the pound in the long run. The Brexit talks need strong leaders on either side of the table who can push for a resolution but now, with both sides having to grapple with domestic issues, it is unlikely that they would have the time to focus on the talks. The pound could gain in the short term due to the troubles in Germany but in the long term, this could begin to affect the UK as well, especially when the situation and the confusion drags on.
Looking ahead to the rest of the day, we are likely to see the pound come under pressure during the London session as it gets dragged down by the euro. We do not have any major news from the US or the UK over the remaining part of the day and hence we could see some consolidation with a bearish bias.
This article was originally posted on FX Empire
