The GBPUSD pair continues to build strength though the dollar has managed to hold steady over the last 24 hours. The progress so far has been slow and steady and it remains to be seen whether the pair would be able to retain its gains today as the moves on Mondays always need to be taken with a pinch of salt due to the generally low volatility.
GBPUSD Showing Some Strength
The pair has moved from the 1.3150 region towards the 1.32 region and it trades comfortably above this region as of this writing. Though there has been no fundamental drivers for such a move, as such, it is generally believed that the pound is getting into a nice position as the Brexit talks progress. The visit from the UK PM May to Brussels last week did not result in any significant decision being made but at the same time, there seems to have been some progress from the stalemate position that we were in, as far as the talks were concerned.
This is indeed some progress for the UK economy and the pound and with most of the UK data coming in as per expectations over the course of last week, it has once again led to some belief in the UK economy and that it would be able to tide over the crisis and the uncertainty surrounding the Brexit process, over the next few weeks. This sentiment is likely to lend support to the pound in the short term which should keep the pair buoyant during this period, as long as the dollar stays steady to weak.
Looking ahead to the rest of the day, we do not have any major news from the UK or the US for the rest of the day but we can expect to see more volatility in todays trading as compared to yesterday. We expect the dollar to continue to remain under pressure as the effect of the passage of the tax reforms bill in the US begin to fade away and the market begins to focus on the incoming data and this should help the GBPUSD pair to move higher in the short term.
This article was originally posted on FX Empire