GBP/USD has lost ground in the Monday session, after two straight losing sessions. In North American trade, the pair is trading at 1.3181, down 0.18% on the day. In economic news, British Construction PMI slipped to 49.5 points, short of the estimate of 50.5 points. There are no major U.S. events. On Tuesday, the U.K. releases Services PMI and BoE Governor Mark Carney testifies before the House of Lords. We’ll also get a look at the services sector in the U.S. with the release of ISM Non-Manufacturing PMI.
The pound is under pressure, dropping 1.0 percent in Thursday. There was disappointing data on Monday, as Construction PMI dropped to 49.5, below the 50-level which separates construction and expansion. The February reading was the first time that the PMI has indicated contraction since March 2018. The turmoil over Brexit is at least partly to blame for the soft PMI, as clients re-evaulate whether to take on commercial projects in a time of uncertainty.
With the clock ticking down towards Brexit Day on March 29, there is a flurry of activity in Westminster. Prime Minister May made headlines last week when she announced another vote on the government’s withdrawal agreement, which is scheduled for March 12. If lawmakers reject that proposal, they will vote the next day on two separate proposals – one on a no-deal Brexit, and the second on requesting the EU to extend Article 50 and delay Brexit past March 29. Investors are confident that this makes a no-deal scenario even more unlikely, which resulted in gains of 2.0% for the pound last week. However, with plenty of turmoil and uncertainty around the Brexit withdrawal, we could see volatility from the pound in the days leading to the parliamentary votes.
Monday (March 4)
- 4:30 British Construction PMI. Estimate 50.5. Actual 49.5
- 10:00 U.S. Construction Spending. Estimate 0.2%. Actual 0.2%
- 19:01 British BRC Retail Sales Monitor. Estimate 0.1%
Tuesday (March 5)
- 4:30 British Services PMI. Estimate 50.0
- 4:30 British FPC Minutes
- 10:00 US ISM Non-Manufacturing PMI. Estimate 57.4
- 10:35 BoE Governor Carney Speaks
*All release times are EST
*Key events are in bold
GBP/USD for Monday, March 4, 2019
GBP/USD March 4 at 11:50 EST
Open: 1.3206 High: 1.3356 Low: 1.3167 Close: 1.3181
GBP/USD was flat in the Asian session. The pair posted showed limited movement in the European session and is flat in North American trade
- 1.3170 was tested earlier in resistance. It remains a weak line and could break in the North American session
- 1.3258 is the next resistance line
- Current range: 1.3170 to 1.3258
Further levels in both directions:
- Below: 1.3170, 1.3070 and 1.2910
- Above: 1.3258, 1.3362, 1.3460 and 1.3350
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