- MarketPulse - https://www.marketpulse.com -

GBP/USD – British Pound Steady, Markets Expect BoE to Stand Pat

The British pound continues to show little movement this week. In North American trade, GBP/USD is trading at 1.3574, up 0.19% on the day. On the release front, there are no major British indicators. In the US, PPI dropped to 0.1%, shy of the estimate of 0.2%. Core PPI edged lower to 0.2%, matching the forecast. On Thursday, the UK releases Manufacturing Production, and the US will publish consumer inflation reports.

The currency markets are not showing much movement after President Trump’s dramatic speech on Tuesday. Trump announced that the US would withdraw from the Iran nuclear deal. Trump blasted the agreement and said that the US would impose stiff sanctions on Iran. However, Britain, France and Germany have said they plan to remain in the deal, and will be holding a high-level meeting with Iranian leaders on how the agreement can be salvaged. With the US acknowledging that the White House does not have a ‘Plan B’, it’s unclear what happens next. Meanwhile, tensions between Iran on one the one side, and US allies Israel and Saudi Arabia on the other are at a fever pitch, and any military confrontation involving these countries could shake up the markets.

Investors are keeping a close eye on the Bank of England, which will set the benchmark interest rate on Thursday. Just a few weeks ago, there were strong expectations that the bank was poised to raise rates by a quarter-point, but some weak releases have soured sentiment towards a rate hike. For example, Preliminary GDP in the first quarter gained only 0.1%, missing the forecast of 0.3 percent. The cautious BoE is expected to maintain rates at 0.50% on Thursday, as short-term interest rates are now pricing in less than a 10 percent probability of a rate increase. Analysts are circling August as the next likely date for a rate hike.

U.S Dollar Rises on Higher Yields, EM pairs suffer [1]

More Volatility on the Way!! [2]

US Pulling Out of Iran Deal Puts Companies Under Threat [3]

 

GBP/USD Fundamentals

Wednesday (May 9)

Thursday (May 10)

*All release times are DST

*Key events are in bold

 

GBP/USD for Wednesday, May 9, 2018

GBP/USD May 9 at 11:35 DST

Open: 1.3549 High: 1.3607 Low: 1.3499 Close: 1.3574

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3301 1.3402 1.3494 1.3613 1.3712 1.3796

GBP/USD showed little movement in the Asian and European sessions. The pair has edged higher 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 (64%), indicative of trader bias towards GBP/USD reversing directions 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.

Kenny Fisher

Kenny Fisher [7]

Market Analyst at OANDA [8]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all [7])