The British pound is showing limited movement in the Tuesday session. In North American trade, the pair is trading at 1.2938, up 0.05% on the day. On the release front, British Nationwide HPI declined 0.1%, just shy of the estimate of 0.0%. In the US, CB Consumer Confidence improved to 122.9, above the forecast of 120.9 points.
The US dollar remains under pressure, as the markets remains focused on the crisis in the Korean peninsula. After a brief hiatus, North Korea is back in the news again, as the rogue country fired a missile over Japanese territory on Tuesday. Japan and the US have sharply condemned the missile launch, and with tensions once again climbing in the Korean peninsula, nervous investors have moved a way from stocks in favor of the safe-haven Japanese yen. If the crisis continues, the yen could make further gains against the greenback.
The Brexit negotiations have resumed in Brussels, as the two sides are meeting for a third round of talks this week. There are large gaps between the sides, and the EU’s chief negotiator, Michel Barnier, has urged the UK to show more “seriousness” in its positions. For its part, the British team has called for more flexibility from the Europeans. Britain wants to discuss a future trading relationship with the EU at the same time that points in contention are dealt with, but the Europeans insist on solving the contentious issues first, such as the size of Britain’s bill and the jurisdiction of the European High Court on European citizens living in the UK. With plenty of bad blood and distrust between the sides, the negotiations promise to be slow and challenging.
At the Jackson Hole meeting last week, Yellen did not discuss interest rate policy, choosing instead to emphasize that the financial regulations put in place since the financial crisis in 2008 should not be undermined. Her message appeared aim at Donald Trump, who has expressed his intention to relax banking and financial regulations which he has argued are hampering business. The markets remain skeptical about a third and final rate hike this year, as the odds of an increase in December have been falling – currently, the odds a December hike are at 35%, down from 42% a month ago.
Tuesday (August 29)
- 2:00 British Nationwide HPI. Estimate 0.0%. Actual -0.1%
- 9:00 US S&P/CS Composite-20 HPI. Estimate 5.6%. Actual 5.7%
- 10:00 US CB Consumer Confidence. Estimate 120.9. Actual 122.9
- 19:01 British Shop Price Index
Wednesday (August 30)
- 4:30 British Net Lending to Individuals. Actual 5.3B
- 8:15 US ADP Nonfarm Employment Change. Estimate 186K
- 8:30 US Preliminary GDP. Estimate 2.7%
*All release times are GMT
*Key events are in bold
GBP/USD for Tuesday, August 29, 2017
GBP/USD August 29 at 12:00 EDT
Open: 1.2931 High: 1.2978 Low: 1.2921 Close: 1.2943
- GBP/USD was flat in the Asian session. In European trade, the pair posted gains but then retracted. GBP/USD is showing limited movement in North American trade
- 1.2865 is providing support
- 1.2946 is currently the next resistance line. It is fluid and could see more action in the North American session
Further levels in both directions:
- Below: 1.2865, 1.2767, 1.2639
- Above: 1.2946, 1.3058 and 1.3159
- Current range: 1.2865 to 1.2946
OANDA’s Open Positions Ratio
In the Tuesday session, GBP/USD ratio is showing long positions with a slim majority of (51%), indicative of a lack of trader bias as to what direction GBP/USD will take next.