GBP/USD: In bearish consolidation below 1.3700 amid escalating Brexit concerns

GBP/USD off two-week lows, draw back dangers be triumphant beneath 1.3700.
Brexit issues strengthen amid the UK-French fishing row, weighs on the pound.
USD holds more impregnable amid hawkish Fed’s expectations, BOE probably to trace at charge hikes.
GBP/USD is beneath stress beneath 1.3700, making an attempt to discover its toes after Friday’s extreme blow. The bears continue manipulate amid a widely improved US greenback and looming Brexit risks.

The US greenback index continues to maintain the greater floor close to two-week tops amid rising expectations of a sooner-than-expected Fed price hike, as Friday’s PCE Price Index accelerated to 4.4% YoY in September vs. 4.2% previous.

The identical is being mirrored in the Treasury yields, with the benchmark 10-year costs up 1.50% so far. This week, markets have thoroughly priced in that the Fed will announce a tapering of its bond-buying.

Brexit in focus
Meanwhile, developing Brexit worries will proceed to undermine the British forex amid an escalating row over fishing rights between the UK and France. Over the weekend, French President Emmanuel Macron stated the row used to be “a test” of the UK’s “credibility”, in a Financial Times (FT) interview.

Separately, the head of the French ports of Calais and Boulogne, Jean-Marc Puissesseau warned, “It will be a drama, it will be a disaster.”

Maroš Šefčovič, Vice-President of the European Commission in cost of Interinstitutional Relations and Foresight, said, “he is worried the (UK) Government will refuse to interact with (Northern Ireland) proposals put ahead with the aid of Brussels.”

Gear up for a large week, the pair will probably stay constrained inside a narrow, with all eyes on the Fed and BOE policy choice whilst Friday’s NFP launch will additionally hog the limelight. In the meantime, merchants will take cues from the UK Final Manufacturing PMI and the US ISM Manufacturing index.


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