GBP/USD rose back to levels last seen in mid-December on the back of US dollar weakness as the ‘Trump Trade’ continues to unravel. A lack of any clear policy headlines from the newly-inaugurated President has taken the heat out of the recent US dollar rally with the US dollar index (DXY) slipping back from January’s high of 103.82 to a current level of 100.36.

Chart: US Dollar Index 30-Minutes (November 17 – January 23)

The British Pound has also been given an uplift as Tuesday’s Supreme Court ruling hovers into view. If the Court rules against the government’s plans, then the triggering of Article 50 could be delayed, leading to a slight easing of PM May’s ‘hard Brexit.’ Analysts also point to the European political calendar as another potential source of frustration, and delay, for PM May who has already stated that she wants to trigger Brexit by the end of March. In Europe, elections in the Netherlands, France, Germany, and potentially Italy, over the next few months will hold the EU’s attention, leaving PM May’s negotiations further down the queue.

And May will want to be able to start divorce proceedings as soon as possible ahead of this Friday’s visit to the White House. PM May will become the first foreign leader to meet the newly-elected President of the US and will begin talks over a major free trade deal, a move suggested and encouraged by President Trump. A positive agreement on trade tariffs between the two countries would strengthen PM May’s negotiating hand ahead of tricky trade talks with EU leaders.

Chart: GBPUSD 30-Minutes (December 23 – January 23)