GBPUSD Daily Fundamental Forecast 21 February, 2017
GBPUSD has been trading within a tight range but with no signs of turning bullish anytime soon. It was a bank holiday in the US yesterday and that also contributed to the slow markets which just added to the consolidation that the pound has been going through for the past week or so. The pair trades around 1.2450 as of this writing and it does look weak for the rest of the day as the dollar strength begins to pick up across the markets.
The markets expect a hawkish Fed in the FOMC meeting minutes in line with what the Fed members have been commenting publicly. Yellen and her team members have also kept open the possibility of a rate hike as early as March which should also almost guarantee three rate hikes in total for the year and if this happens, it would be bullish for the dollar and we could finally see the dollar break through the tight ranges and finally turn completely bullish, something that we have been expecting since the beginning of the year.
Looking ahead to today, we have the inflation report hearings being released and the traders would be watching it closely to see how the UK economy is performing as compared to the promises and expectations. There are no major economic news from the US as the market begins to build up for the FOMC minutes tomorrow.