MarketPulse | Nov 16, 2017 12:19AM ET
The British pound is looking for its footing in the Wednesday session, as the currency posted gains but then retracted. In North American trade, GBP/USD is trading at 1.3170, up 0.03% on the day. On the release front, the British Average Earnings Index remained unchanged at 2.2%, just above the estimate of 2.1%. Claimant Count Change gained 1.1 thousand, better than the estimate of 2.0 thousand. In the US, CPI and Core CPI matched the forecasts, with gains of 0.1% and 0.2%, respectively. Consumer spending reports were a mix – retail sales gained 0.1%, shy of the estimate of 0.2%. Core Retail Sales came in at 0.2%, beating the forecast of 0.0%. There was disappointing news on the manufacturing front, as the Empire State Manufacturing Index slowed to 19.4 points, well short of the estimate of 25.3 points. This reading marked a 4-month low.
There were no surprises from British employment numbers on Wednesday. Wage growth remained steady at 2.2%, but this is well below inflation, which means that the consumer is seeing her purchasing power drop, and weaker consumer spending could hurt the economy. The BoE raised interest rates to 0.50% earlier this week, but this move has yet to push inflation lower. Unemployment is at historical lows, and economists expect the robust labor market to produce higher wages. However, the current situation mirrors what is happening in the US, where an employment market running at capacity has not translated into higher wages for workers.
The pound has been under pressure, as the currency dipped below the 1.31 line on Monday and Tuesday. Investors are nervous as Prime Minister May’s leadership is showing large cracks. Two ministers have been forced to resign from May’s cabinet in recent weeks, and Foreign Secretary Boris Johnson has been heavily criticized for comments about a British citizen who is on trial in Iran. May appears to have lost control over her cabinet, with senior ministers openly attacking each other and questioning government policy. On Monday, British media reports said that 40 MPs have signed a letter of no confidence in May’s leadership – a worrisome sign that her days at 10 Downing Street could be numbered.
The Brexit talks remain deadlocked, with large gaps between the sides, such as the size of Britain’s divorce bill. Theresa May’s domestic troubles haven’t helped matters. Her cabinet remains divided on Brexit policy, with senior ministers quarreling over how to handle Britain’s departure from the EU, which is scheduled for March, 2019. May hasn’t been able present a coherent Brexit policy to the Europeans or to the voters at home, raising doubts as to whether May can deliver the goods on Brexit. On Monday, Brexit Secretary David Davis said he would introduce legislation that would allow MPs to vote on the final Brexit deal, but lawmakers would not be able to amend the legislation.
GBP/USD Fundamentals
Wednesday (November 15)
Thursday (November 16)
*All release times are GMT
*Key events are in bold
GBP/USD for Wednesday, November 15, 2017
GBP/USD November 15 at 12:00 EDT
Open: 1.3166 High: 1.3215 Low: 1.3130 Close: 1.3170
GBP/USD Technical
S1 | S2 | S1 | R1 | R2 | R3 |
1.2904 | 1.3022 | 1.3122 | 1.3224 | 1.3347 | 1.3445 |
GBP/USD edged lower in the Asian session. In European trade, the pair posted gains but then retracted. GBP/USD is showing little movement in North American trade
Further levels in both directions:
OANDA’s Open Positions Ratio
GBP/USD ratio is showing slight movement towards long positions. Currently, long positions have a majority (56%), indicative of trader bias towards GBP/USD breaking out and moving higher.
Original post
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.