The GBP/USD significantly increased in value during the previous trading session after the USD dropped following the release of the latest FOMC meeting minutes. The market was somewhat docile during the rest of yesterday’s session but immediately picked up after the release of the minutes during the North American session yesterday, and has caused the USD to undergo corrections across the board.
However, the reaction of the GBP/USD pair to this phenomenon is somewhat docile compared to other USD-related currency pairs, and this is expected to keep the bulls on their toes. Initially, the GBP/USD pair was expected to rise exponentially since the UK construction PMI data clocked in a highly positive reading and exceeded its market expectations of 54.2, and the FOMC minutes lacked the expected hawkishness from the market. But the reason why this currency pair’s growth was significantly limited is that the various risks and uncertainties surrounding the Brexit process continues to dog a lot of traders due to the general confusion within this issue. This is why a number of speculators are saying that the GBP/USD would be receiving the shorter end of the stick once the USD regains its strength.
Although the UK is not expected to release any economic data for today, the US will be releasing a number of important economic data along with the highly essential NFP report, which is expected to determine the overall market sentiment for the rest of the month. If these set of data comes out as positive, then the USD could possibly rebound and could be sustained until the end of January.