GBP/USD: In bearish consolidation below 1.3700 amid escalating Brexit concerns – FXStreet

GBP/USD is under pressure below 1.3700, trying to find its feet after Fridays severe blow. The bears retain control amid a broadly stronger US dollar and looming Brexit risks.

The US dollar index continues to hold the higher ground near two-week tops amid rising expectations of a sooner-than-expected Fed rate hike, as Fridays PCE Price Index accelerated to 4.4% YoY in September vs. 4.2% previous.

The same is being reflected in the Treasury yields, with the benchmark 10-year rates up 1.50% so far. This week, markets have fully priced in that the Fed will announce a tapering of its bond-buying.

Meanwhile, growing Brexit concerns will continue to undermine the British currency amid an escalating row over fishing rights between the UK and France. Over the weekend, French PresidentEmmanuel Macron said the row was a test of the UKs credibility, in a Financial Times (FT) interview.

Separately, the head of the French ports of Calais and Boulogne, Jean-Marc Puissesseau warned, It will be a drama, it will be a disaster.

Maro efovi, Vice-President of the European Commission in charge of Interinstitutional Relations and Foresight, said, he is concerned the (UK) Government will refuse to engage with (Northern Ireland) proposals put forward by Brussels.

Gear up for a big week, the pair will likely remain confined within a narrow, with all eyes on the Fed and BOE policy decision while Fridays NFP release will also hog the limelight. In the meantime, traders will take cues from the UK Final Manufacturing PMI and the US ISM Manufacturing index.

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GBP/USD: In bearish consolidation below 1.3700 amid escalating Brexit concerns - FXStreet