Will Bright Summer Predictions Play Out For GBP/USD?



The GBP/USD currency pairing is predicted to strengthen throughout 2017 after suffering from a volatile 2016. Last year saw the pound reach its lowest levels for over 30 years while the US dollar experienced all the uncertainty and volatility expected whenever there is a presidential election taking place. There are a number of factors at play that could see the currency pairing strengthen in time to experience a positive few summer months.
Post-Referendum Recovery

The pound is predicted to come out of 2017 stronger than it entered, with GBP/USD hopefully recovering towards 1.30 over the next 12 months. A lot of uncertainty and volatility is expected, but there is unlikely to be as shocking an event as the result of Britain’s EU referendum which kick-started the currency pairing’s decline. A recovery was underway at the end of 2016 and that is believed to continue into the new year, so that by summer it will be in a much stronger position, though there will undoubtedly be slip-ups along the way.

Brexit Negotiations Impact

Much of the uncertainty for the pound will depend on what is decided in the upcoming Brexit negotiations. Prime Minister Theresa May wants to have triggered Article 50 by the end of March, meaning that by summer the process of Brexit will have begun. Whether a hard or soft Brexit is agreed upon (with the UK remaining or leaving the single market etc.) could have a significant impact upon the pound’s value and that of the GBP/USD pair.

Trump’s Trade Deal

The UK and USA have always had close ties, with the US being Britain’s second biggest trading partner after Germany. After Brexit, such a good relationship will be highly beneficial for both nations. A new trade deal will need to be created once the UK is outside of the EU, which may not be until the end of March 2019. However, both President Trump and Prime Minister Theresa May have agreed to begin making a start on things already, with negotiations sure to help strengthen the GBP/USD pair.

Further Factors

There will be many other factors that affect the GBP/USD pair, including employment levels, national debt and more. Opening a trading account with FxPro will allow anyone to begin profiting from movements between the two currencies. If Brexit and trade negotiations go smoothly in the first half of the year, then the currency pair can expect to enjoy a positive few summer months.

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