GBPUSD Fundamental Analysis Post UK GDP and Brexit


The fundamental analysis of today’s GBPUSD shows that GBPUSD seesaws near three-week low after Moody’s reduced the UK outlook to negative. The strength of the dollar and the cautious mood of the market in anticipation of movements in the critical British data pair are limiting the pair’s movements. The UK GDP, Manufacturing/Industrial Production in the spotlight amid the US holiday.

11 November 2019, AtoZMarketsAlthough the strong US dollar (USD) and lower Moody’s on the UK credit outlook are putting downward pressure on the GBPUSD pair. The odds are trading around 1.2793 at approaching the opening of London, Monday.

GBPUSD Fundamental Analysis – 11 November 2019

The greenback holds the latest gains. And global investors look for security in the uncertainty surrounding the US-China trade deal and protests in Hong Kong. The geopolitical crisis in the Middle East could also support the demand for a haven of the dollar.

On the political front of the United Kingdom, the fact that the Chancellor did not justify his criticism of the spending plans of the Labor party’s opposition. That raises doubts about the Prime Minister’s (PM) Boris Johnson in the December polls. Besides, the Scottish National Party (SNP) continues the general election campaign. That is adding to the tension of the ruling party.

As a result, market sentiment was softer, with most Asian equities falling by more than 1.0% due to Hong Kong losses of more than 2.0%.

GBPUSD Fundamental analysis

Given the absence of US traders, due to the Veterans Day Holiday, markets will look for British data for new impulses. Among them, the preliminary reading of the third quarter (Q3) gross domestic product (GDP), combined with manufacturing and industrial production figures for September, will be the key.

While the GDP of the United Kingdom should recover to + 0.3% against -0.2% in the QoQ. The figures of the previous year could go from 1.3% to 1.1%. Also, manufacturing output could decline by -0.2% from -0.7% previously. While industrial production could fall from -0.6% to -0.1%.

Read More: 11 November Free EUR/USD, XAU/USD, ETH/USD and BTC/USD Trading Signals

UK Outlook Cut To Negative On Policy’ Paralysis

Moody’s Investors Service, the US-based rating agency, said in a statement made early Monday that it confirmed UK’s Aa2 long-term issuer and senior unsecured ratings but cut the country’s sovereign credit outlook to ‘negative.’

The reason for declassing the outlook is quoted as saying that the country’s ability to shape policy has weakened in the Brexit era. Since it has its commitment to fiscal discipline. The Brexit era policy-making process has revealed how the capacity and predictability. That has traditionally defined the UK’s institutional framework has diminished.

In the expectation of a decline, the GBPUSD has fallen from the highs of 1.2805. But it remains in the last trading range seen in Asian opening hours. At press time, GBPUSD is trading + 0.18% at 1.2793. It is unable to hold above the 1.28 level.

However, opinion polls over the weekend showed that the Conservative Party of British Prime Minister Johnson was ahead of the opposition Labor Party. That continues to maintain the somewhat sustained sentiment around the pound.

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