GBP/USD has shown little movement in the Tuesday session. In North American trade, GBP/USD is trading at 1.2430. In the US, revised GDP remained at 1.9%, shy of the forecast of 2.1%. The CB Consumer Confidence report jumped to 114.8, well above the estimate of 111.1 points. As well, President Donald Trump will address a joint session of Congress. In the UK, BoE Deputy Governor-Designate Charlotte Hogg testified before the Treasury Select Committee. Later in the day, the UK releases the BRC Shop Price Index. On Wednesday, both the UK and US releases Manufacturing PMI reports.
The BoE’s incoming deputy governor, Charlotte Hogg, told the treasury committee that Brexit remained the “most significant challenge” for monetary policymakers, noting that consumer spending could drop more sharply than forecast by the BoE. The British economy has weathered the Brexit storm fairly well, but BoE Governor Mark Carney continues to warn that Britain’s departure from the EU will take a toll on the economy, and his cautious stance was echoed by BoE Chief Economist Andy Haldane last week. Haldane warned that a sharp increase in market expectations for an interest rate could hurt the “fragile” economy. Haldane also expressed support for Carney’s neutral stance over interest rate movement. Although inflation levels have risen and are close to the BoE’s target of 2 percent, Carney has signaled that the BoE is in no rush to raise interest rates. Higher rates would boost the weak British pound, which has dropped a whopping 17 percent since the Brexit vote back in June 2016.
It’s crunch time for Donald Trump later on Tuesday. The president delivers his first speech before Congress, and the speech could have huge ramifications for the financial markets. Since Trump’s stunning election upset, the stock markets are sharply higher, but the markets will be expecting some details about Trump’s economic agenda. Trump recently promised to unveil a “phenomenal” tax reform package and significant spending on infrastructure, but hasn’t provided any details. Tuesday’s speech marks a critical opportunity for the new administration, which is still trying to find its bearings after a rocky first month. If Trump fails to present specifics in terms of numbers or at least provide some timelines, market sentiment will likely sour and this could hurt the US dollar.
Tuesday (February 28)
- 4:15 BOE Deputy Governor-Designate Charlotte Hogg Speech
- 8:30 US Preliminary GDP. Estimate 2.1%. Actual 1.9%
- 8:30 US Goods Trade Balance. Estimate -66.0B
- 8:30 US Preliminary GDP Price Index. Estimate 2.1%
- 8:30 US Preliminary Wholesale Inventories. Estimate 0.5%.
- 9:00 US S&P/CS Composite-20 HPI. Estimate 5.3%
- 9:45 US Chicago PMI. Estimate 53.2
- 10:00 US CB Consumer Confidence. Estimate 111.1. Actual 114.8
- 10:00 US Richmond Manufacturing Index. Estimate 10
- 19:01 British BRC Shop Price Index
- 21:00 President Trump Speech
Upcoming Key Events
Wednesday (March 1)
- 4:30 British Manufacturing PMI. Estimate 55.7
- 10:00 US ISM Manufacturing PMI. Estimate 56.2
*All release times are GMT
*Key events are in bold
GBP/USD for Tuesday, February 28, 2017
GBP/USD February 28 at 11:30 EST
Open: 1.2437 High: 1.2470 Low: 1.2404 Close: 1.2426
- GBP/USD edged up in the Asian session. The pair recorded small gains in European session but has moved higher in North American trade
- 1.2351 is providing support
- 1.2471 is the next line of resistance
Further levels in both directions:
- Below: 1.2351, 1.2272 and 1.2143
- Above: 1.2471, 1.2579, 1.2674 and 1.2775
- Current range: 1.2351 to 1.2471
OANDA’s Open Positions Ratio
GBP/USD ratio has shown limited movement this week. Currently, long positions have a majority (62%), indicative of trader bias towards GBP/USD breaking out and moving upwards.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.