GBP/USD set to struggle due to three UK issues

GBP/USD has been struggling to recover from Wednesday's sharp fall. Massive dollar strength and a trio of UK issues point down, according to FXStreet’s Analyst Yohay Elam.

See: Potential for BoE rate increases in 2022 suggests GBP outperformance – CIBC

Furlough finishes

“Around 5% of the British workforce is still on the pandemic-era furlough program which expires on Thursday. While some will return to their jobs, others could remain out of the workforce for various reasons. High uncertainty about the implications of the move could weigh on the pound.”

Gasoline crisis

“Petrol stations are still suffering from long queues amid fears that they would dry out. The lack of lorry drivers – many are EU nationals – resulted in dry outs. The army is ready to help but the crisis has yet to be resolved.” 

Brexit

“Apart from the problems at the pump, the UK and France remain at odds over fishing rights in the English Channel. The seemingly never-ending row over the Northern Irish protocol also keeps a lid on the pound.”