GBPUSD Fundamental Analysis Ahead of UK Services PMI 

GBPUSD stops a two-day losing streak due to the broad USD pullback.  Here is the GBPUSD Fundamental Analysis of 06 January, 2020. Risk reshuffle, catalysts of doubts about US monetary policy, the debt problem seems to have played its role. The Markit PMIs from the UK and the US will provide intermediate directions.

06 January, 2020 | AtoZ Markets – GBPUSD isn’t left behind, concerning the latest decline in the US dollar (USD). That, in turn, probes the recent declines, while trading around 1.3076, before the London open on Monday. Traders will keep an eye on the UK Services PMI for a new impulse in a context of broad risk-off.

GBPUSD Fundamental Analysis – 06 January, 2020

The dollar is likely to consolidate its latest gains, due to a series of catalysts. That push buyers to rethink their risk forecasts. This includes the ability of Iran / Iraq to confront the United States and the willingness of world leaders to defuse warlike tensions.

Also contributing to the greenback’s recent pullback are comments from the President of the Fed Bank, John Williams, and the headlines of the Chinese newspaper Global Times (GT). The Fed’s support for an easy money policy could call into question likely rate hikes. The GT’s view that the US debt problem is out of control seems to have a basis.

However, the UK PM and the Minister for Foreign Secretary Dominic Raab have indirectly shown their support for the assassination of Iranian General Qassem Soleimani by the US. However, Britain continues to support Germany and France in an attempt to tame the risk of war.

Elsewhere, the opposition British Labor Party will determine the timetable for the election of its next leader on Monday. Leading candidate Keir Starmer appears to have accepted Brexit, while Jess Phillips suggests that she may seek to join the EU if Brexit fails.

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Post Brexit Trade

The British PM will meet Ursula von der Leyen, President of the European Commission on Wednesday and could discuss Brexit procedures. However, the Daily Mail suggests that conservative senior leaders ask Boris Johnson to launch parallel post-Brexit trade talks with the US to put pressure on the EU. And it may prevent Brussels from dragging its feet to reach a deal by the end of 2020.

The latest December final readings of the UK Services PMI expected at 49.2 from 49.00. Previously, it acts as an immediate catalyst, political/Brexit headlines and American Markit figures are worth watching.

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