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Thomson Reuters
Dec 03 - 08:36 AM
GBP/USD - COMMENT-Don't Bet On GBP/USD Weathering The Political Storm
First appeared on eFXplus on Dec 03 - 06:35 AM

With a political storm approaching and year-end notorious for illiquid conditions and fragile risk appetite, sterling may be the worst currency to hold.
For cable traders who should be seeing the dollar as premium buy after the U.S./China truce nL1N1Y807N, the potential for the pair to drop is significant.
UK PM Theresa May seems to face a hopeless task trying to get her Brexit deal through parliament on Dec.
11, and the uncertainty is sure to weigh on the pound.
It's worth betting it could fall further in the political battle that would follow the deal's rejection.
Those who bet GBP/USD drops will see any profits bolstered by rates favourable to the dollar, and that gap will grow when the Fed raises rates on Dec.
19.
With markets barely pricing in a single rate increase next year, the potential for a surprise by the Fed, which once predicted four increases, is high.

GBPUSD daily Click here

Fed funds to end 2019 Click here

Source:
Thomson Reuters IFR Markets

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