The British has posted considerable losses in the Monday session. In North American trade, GBP/USD is trading at 1.3108, down 0.61% on the day. On the release front, British Rightmove HPI declined 0.8%, its third decline in four releases. In the US, the sole event is the Federal Budget Balance, with a deficit of $58.2 billion expected. On Tuesday, the UK releases a host of inflation indicators, led by CPI. The US will publish Core CPI and CPI.
The pound has started the week on a sour note, dropping close to the 1.31 level. Investors are wary as Prime Minister Theresa May is facing serious challenges. Two ministers have been forced to resign from May’s cabinet in recent weeks, and Foreign Secretary Boris Johnson is being criticized for comments about a British national currently in detention 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 are moving slowly, and one major sticking point is the size of Britain’s divorce bill. The European Union is demanding EUR 60 billion, while Britain has countered with an offer for EUR 20 billion. Britain wants to move on to discussing a trade deal with the continent, but the Europeans are insisting on more progress on the divorce bill as well as on other non-trade issues. If the sides still remain deadlocked in December without no deal in sight, hardliners on both sides could derail the talks completely, which would send shivers up the spines of investors and hurt the British pound. The Europeans are also wary about the ability of Theresa May to deliver the goods, given her continuing struggles at home. May hasn’t been able to present a coherent Brexit policy to the Europeans or to the voters at home, further eroding confidence in her leadership.
Sunday (November 12)
- 19:01 British Rightmove HPI. Actual -0.8%
Monday (November 13)
- 14:00 US Federal Budget Balance. Estimate -58.2B
Tuesday (November 14)
- 4:30 British CPI. Estimate 3.1%
- 5:00 BoE Governor Mark Carney Speaks
- 5:00 Fed Reserve Chair Janet Yellen Speaks
- 8:30 US PPI. Estimate 0.1%
- 8:30 US Core PPI. Estimate 0.2%
*All release times are GMT
*Key events are in bold
GBP/USD for Monday, November 13, 2017
GBP/USD November 13 at 11:20 EDT
Open: 1.3189 High: 1.3189 Low: 1.3052 Close: 1.3108
GBP/USD edged lower in the Asian session and lost more ground in European trade. The pair has posted slight gains in North American trade
- 1.3022 is providing support
- 1.3122 has switched to a resistance role after losses by GBP/USD. It is a weak line
Further levels in both directions:
- Below: 1.3022, 1.2904 and 1.2811
- Above: 1.3122, 1.3224, 1.3347 and 1.3445
- Current range: 1.3022 to 1.3122
OANDA’s Open Positions Ratio
In the Monday session, GBP/USD ratio is showing long positions with a majority (55%). This is indicative of trader bias towards GBP/USD reversing directions and moving higher.