GBP/USD remains capped below 1.2600

4 July, 2019

Manages to recover on broad USD weakness, weaker US rates. Bearish bias intact amid dovish Carney’s speech and weak UK fundamentals. Lack of UK macro news and holiday-thinned trading keeps moves limited.

The GBP/USD pair returned to the familiar trading range near 1.2585 region last hour, after having dipped briefly to daily lows at 1.2569 levels. However, the recovery attempts continue to remain capped below the 1.26 handle amid a lack of fresh economic drivers and quiet trading. The US observes Independence Day holiday this Thursday.

The Cable came under heavy selling pressure earlier this week and reached two-week troughs on Wednesday at 1.2557 after the UK manufacturing, construction and services sector activity deteriorated sharply in June and added to increased odds of a Bank of England (BOE) rate cut. The dovish BOE expectations were fuelled by the central bank’ Governor Carney’s growing concerns over the economic outlook that convinced money markets to price in a rate cut over the next 12 months.

However, the spot managed to recover some ground in the US last session after the US dollar tumbled across the board on downbeat US factory orders and ISM services PMI data. Weak US data re-ignited Fed rate cut expectations. Meanwhile, the US President Trump’s comments on currency manipulation also added to the weight on the greenback.

Looking ahead, the major will remain at the mercy of the USD price-action and UK political updates amid a data-empty UK docket and slowing volumes. The GBP markets continue to remain wary over the next Brexit policy to be pursued by the new leadership, as no deal Brexit looks the most likely outcome.


Source link  
What will move Euro out of ECB rate decision?

This is the last policy announcement from the ECB before President Mario Draghi makes way for his replacement...

Gold drops to fresh session lows

Fails to capitalize on last week's goodish bounce, despite a subdued USD demand. A goodish bounce in US bond yields/risk-on mood prompts some fresh selling...

Gold to retest trend channel resistance

The precious metal's corrective slide on Friday, from near six month tops, stalled ahead of an important confluence resistance break-point now turned support...


Gold looks to $1210 ahead of US data

Stalled US dollar bounce combined with negative European equities, Treasury yields underpin. Volatile within $ 5 range ahead of the US core PCE data...

Gold and oil shorts covered

According to the CFTC Weekly Report (W/E July 10), as the WTI crude oil spiked toward $75/bbl amid fears of supply shortages and low spare capacity, which...

Global markets in a delicate spot

Analysts at Westpac, suggest that global markets remain in a delicate spot due to ongoing uncertainty of the US/China trade saga and growing geopolitical tensions...


Powell to stick to gradual path

Analysts at Deutsche Bank suggest that new Fed Chair Powell’s testimony is at 3pm GMT and he will be speaking on behalf of the FOMC...

GBP futures: bottomed out?

In light of advanced figures for GBP futures markets, open interest decreased by almost 5K contracts on Friday vs. Thursday's 209,855 contracts...

Strong market sentiment continues

Chief Analyst, Allan von Mehren at Danske Bank suggests that global market sentiment continues to be strong with further decent increases in stock...

  


Share it on:   or