- GBP/USD consolidates the recovery below 1.3500 as a new week kicks in.
- The UK is set to trigger Article 16, as Brexit risks intensify.
- The US dollar could benefit amid potential risk-aversion, ahead of Fedspeak.
GBP/USD appears to pause its recovery from two-month lows of 1.3424 in early Asian dealings on Monday, as Brexit concerns are seen returning, spoiling the party for the GBP trading.
Brexit woes back in play
The 1.3500 remains a tough nut to crack for the GBP bulls, as the Irish Foreign Minister Simon Coveney warned against the UK government’s readiness to trigger Article 16 of Northern Ireland. Coveney said that doing so could lead to a trade dispute between the European Union (EU) and the Kingdom.
Further, the Bank of England’s (BOE) status-quo on the interest rates decision last week combined with Governor Andrew Bailey's cautious stance will continue to remain a weight on the major, despite the recent pullback in the US dollar across the board.
On Friday, the US dollar corrected sharply from the yearly highs against its major peers, tracking the sell-off in the Treasury yields, as investors reassessed the Fed’s tightening bets after Chair Jerome Powell said that they are patient on the rate hike last Wednesday.
However, with the Brexit woes back, GBP/USD’s recovery is likely to remain at risk, with Bailey’s speech and Fedspeak awaited later on Monday.\
Separately, the much-trumpeted free trade agreements (FTAs) “barely scratch the surface of the UK’s challenge to make up the GDP lost by leaving the EU”, according to an analysis commissioned by The Independent from top academics at the University of Sussex UK Trade Policy Observatory.
GBP/USD: Additional levels to consider
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stays in positive territory above 1.0850 after US data
EUR/USD clings to modest daily gains above 1.0850 in the second half of the day on Friday. The improving risk mood makes it difficult for the US Dollar to hold its ground after PCE inflation data, helping the pair edge higher ahead of the weekend.
GBP/USD stabilizes above 1.2850 as risk mood improves
GBP/USD maintains recovery momentum and fluctuates above 1.2850 in the American session on Friday. The positive shift seen in risk mood doesn't allow the US Dollar to preserve its strength and supports the pair.
Gold rebounds above $2,380 as US yields stretch lower
Following a quiet European session, Gold gathers bullish momentum and trades decisively higher on the day above $2,380. The benchmark 10-year US Treasury bond yield loses more than 1% on the day after US PCE inflation data, fuelling XAU/USD's upside.
Avalanche price sets for a rally following retest of key support level
Avalanche (AVAX) price bounced off the $26.34 support level to trade at $27.95 as of Friday. Growing on-chain development activity indicates a potential bullish move in the coming days.
The election, Trump's Dollar policy, and the future of the Yen
After an assassination attempt on former President Donald Trump and drop out of President Biden, Kamala Harris has been endorsed as the Democratic candidate to compete against Trump in the upcoming November US presidential election.