GBPUSD Higher on Weaker Dollar
The dollar has been hit by the firing of the US Secretary of State, Rex Tillerson, by Trump over twitter and this continues the sage of resignations and firings from the White House ever since Trump took over. Though there may be specific reasons for each person to leave, this points to a policy paralysis a people keep changing and none in the team is confident of implementing the policy decisions as they do not know how long they are going to last in their position. This has led to uncertainty and the markets hate this and that is why they are taking their anger out on the dollar.
We are also having reports that there could be tariffs imposed on Chinese goods and again, this is something that is likely to increase the rik and uncertainty and hence not favorable for the dollar. The combination of these events has helped the pound to finally make the move towards the 1.40 region and now we are seeing the pair trade close to this region looking for a final push through this region so that the next bullish leg can be confirmed.
Looking ahead to the rest of the day, we do not have any major news from the UK but we have the retail sales and PPI data from the US. The inflation data came in as per expectations yesterday but that did little to support the dollar. We expect more of the same today as we believe that the weakness in the dollar is likely to be the theme in the markets for the short term.