The pair has been under pressure due to the growing strength of the dollar.
The GBPUSD pair ended the week below the 1.40 region but by the looks of it, there does not seem to be any specific trend in the pair and this was proved by the choppy trading that was witnessed in the pair over the last week. The pair could not decide which way it wanted to move in and this made the pair move higher and lower on either side of the 1.40 region for much of the week.
GBPUSD Under Pressure
The focus of the previous week was clearly on the dollar as it was buoyed by a hawkish Fed. The FOMC minutes were released during the middle of the week and a thorough perusal of the same made it clear that the Fed could even be looking to hike the rates more than 3 times this year if the incoming data supported it. The market expects 3 rate hikes at the minimum and anything more than that during the year would be extremely bullish for the dollar.
Hence an indication of the same in the meeting minutes from last month, helped the dollar to gain in strength and this placed the pair under pressure for most of the week. But on the other hand, the UK has also been able to throw up some decent data and this has helped the pound along with a hawkish BOE which has made it clear that it would be ready to act if needed so, irrespective of how the Brexit process pans out. So, it really wasnt one way traffic over the last week, unlike in some of the other currency pairs involving the dollar and that is why the pound bulls have not lost their hope yet.
Looking ahead to the coming week, we are going to see some month end flows affecting the pound as we head towards the end of the month. We are also going to see the new Fed Chief Powell testify and also we have the GDP data from the US as well, during the coming week. On the other side, we have speeches from the UK PM and the BOE Governor as well and hence, all these events are likely to bring in a lot of volatility in the coming week. If the pound is able to survive the dollar storm in the coming weeks, then we should see it gain a fair bid in the short and medium term which should push it back towards its range highs.