The British pound has posted gains in the Monday session. In North American trade, GBP/USD is trading at 1.3239, up 0.18% on the day. On the release front, there are no British indicators on the schedule. In the US, the sole event is CB Leading Index. The indicator gained 1.2%, above the forecast of 0.6%. On Tuesday, the UK releases Public Sector Net Borrowing and the BoE Inflation Report Hearings. The US will publish Existing Home Sales. As well, US Federal Reserve Chair Janet Yellen will speak at an event in New York City.
There was good news from US construction numbers on Friday. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Start also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.
One of the main sticking points in the Brexit negotiations is the size of Britain’s divorce bill. The European Union has demanded EUR 60 billion, while Britain has made an offer of EUR 20 billion. Prime Minister May apparently wants to compromise at EUR 40 billion, but senior ministers Boris Johnson and Michael Gove are reluctant to pay more without a clearer idea of what form a new trade relationship with Europe will take. The divisions within May’s cabinet have only weakened May’s hand. May hasn’t been able present a coherent Brexit policy to the Europeans or to the voters at home, raising doubts as to whether she can deliver the goods on Brexit. With Britain scheduled to leave the EU in March 2019, there is pressure on both sides to begin trade talks before the end of 2018.
Monday (November 20)
- 10:00 US CB Leading Index. Estimate 0.6%. Actual 1.2%
- 13:30 BoE Deputy Governor David Ramsden Speaks
Tuesday (November 21)
- 4:30 British Public Sector Net Borrowing. Estimate 6.6B
- 5:00 BoE Inflation Report Hearings
- 6:00 British CBI Industrial Order Expectations. Estimate 3
- 10:00 US Existing Home Sales. Estimate 5.42M
- 18:00 US Federal Reserve Chair Janet Yellen Speaks
*All release times are GMT
*Key events are in bold
GBP/USD for Monday, November 20, 2017
GBP/USD November 20 at 12:00 EDT
Open: 1.3214 High: 1.3280 Low: 1.3187 Close: 1.3239
GBP/USD was flat in the Asian session. The pair edged higher in European trade and is showing little movement in North American trade
- 1.3186 is providing support
- 1.3321 is the next resistance line
Further levels in both directions:
- Below: 1.3186, 1.3048 and 1.2930
- Above: 1.3321, 1.3402 and 1.3503
- Current range: 1.3186 to 1.3321
OANDA’s Open Positions Ratio
In the Monday session, GBP/USD ratio is showing an almost even split between long and short positions. This is indicative of a lack of trader bias as to what direction GBP/USD will take next.