GBPUSD bounces off 12-day low against optimism surrounding the Brexit. The British government has already declared that Brexit deal legislations will be through the Commons by 09 January. The UK and US economic calendar will also determine the direction of trade. Here is the GBPUSD Fundamental Analysis of 20 December, 2019.
20 December, 2019 | AtoZ Markets – The GBPUSD pair is at 1.3020 ahead of the London open on Friday, benefits from Brexit’s optimism. GBP traders turn confident of the faster/smooth Brexit ahead of the House of Commons’ voting on the UK PM’s Brexit bill.
GBPUSD Fundamental Analysis – 20 December 2019
The Commons will pass Brexit deal legislations on 09 January. The three-day deadline had previously been rejected by members of parliament (MP). But it is unlikely to happen this time considering the Tory leadership after the recent general election.
On Thursday, downbeat UK Retail Sales and no major positive news from the Queen’s speech or Bank of England (BOE) monetary policy meeting seem to have weighed on GBP. However, the general weakness of the US dollar (USD), mainly due to disappointing home data, limited the losses.
The EU Withdrawal Agreement Bill (WAB) will allow the United Kingdom to leave the European Union on 31 January. It is preparing the ground for a transitional period which will not go beyond December 2020. Besides, according to the BBC, the bill will also allow more British judges to depart from previous rulings of the highest court in the EU.
UK and US GDP
Voting results will be out around 3:00 p.m. GMT on Friday. Investors can watch the final reading of the UK’s third-quarter (Q3) gross domestic product (GDP) for the intermediate moves. The forecast does not suggest any change in the GDP figures on QoQ and YoY basis that are 0.3% and 1.0% respectively.
The United States has some additional details like consumer spending and sentiment data over the third-quarter GDP will increase the burden on market watchers. “The key core PCE price index probably rose only 0.1% in November, which brings the 12-month change down to 1.5% from 1.6% in October. Base effects should help stimulate the 12-month change again in the first quarter. But for now, the pace is moving away from the Fed’s 2% target.
We expect the PCE price index to increase by 0.2% m/m, bringing the 12-month change to a still-low 1.4% from 1.3%. Besides, we expect personal spending to increase by 0.4% in November, the largest monthly increase in four months. Despite this, the November impression should continue to indicate that household spending is moderating in the fourth quarter. Finally, we expect UMich’s consumer sentiment to improve slightly to 99.5 from its preliminary value of 99.2 for December, “said TD Securities.
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