GBP/USD – British pound subdued, investors eye GDP, manufacturing production

GBP/USD is showing limited movement in the Tuesday session. In North American trade, GBP/USD is trading at 1.3039, down 0.18% on the day. On the release front, there no major British events. In the U.S., the highlight was JOLTS Jobs Openings, which dropped sharply to 7.09 million, down from 7.58 million a month earlier. This reading was well short of the forecast of 7.54 million. On Wednesday, the U.K. posts the monthly GDP report, with an estimate of 0.2%. We’ll also get a look at manufacturing production, which is expected to show a gain of 0.2%. The U.S. will publish consumer inflation data. CPI is expected to improve to 0.3% and Core CPI is projected to climb to 0.2%. As well, the FOMC releases the minutes of the March policy meeting.

The Brexit chaos continues, as Britain and the EU try to find some way out of the logjam. The EU will have to grant another extension by Friday, otherwise Britain will crash out with no agreement in place. Prime Minister May is meeting with President Merkel and President Macron, hoping to secure another short extension. The Europeans are exasperated by the shenanigans in London, but nonetheless would prefer that Britain leave with a deal in place. Brussels has signalled that it could agree to a year-long extension, but that is likely to inflame many of May’s conservative colleagues, who want to depart the EU as soon as possible. May is also holding talks with opposition leader Jeremy Corbyn, hoping to find some common ground in order to break the deadlock in parliament over Brexit.

On Wednesday, investors will be keeping a close look at Federal Reserve, which releases the minutes of the March meeting. At the meeting, the Fed said it would start tapering the reduction of its balance sheet in May. This marks a loosening of policy, and comes in response to weaker economic data out of the U.S. in recent months. The minutes should be treated as a market-mover, and if the Fed sends a dovish message to the markets, the dollar could lose ground.

FX rumbles as the street slumbers

UK economy to lose 3.5% of GDP in no-deal Brexit: IMF

GBP/USD Fundamentals

Tuesday (April 9)

• 5:35 British 10-year Bond Auction. Actual 1.11/2.3
• 6:00 US NFIB Small Business Index. Estimate 101.3. Actual 101.8
• 10:00 US JOLTS Job Openings. Estimate 7.54M. Actual 7.09M
• 10:03 US IBD/TIPP Economic Optimism. Estimate 53.2. Actual 54.2
• 17:00 US FOMC Member Quarles Speaks
• 18:45 US FOMC Member Clarida Speaks

Wednesday (April 10)

• 4:30 British GDP. Estimate 0.2%
• 4:30 British Manufacturing Production. Estimate 0.2%
• 8:30 US CPI. Estimate 0.3%
• 8:30 US Core CPI. Estimate 0.2%
• 14:00 US FOMC Meeting Minutes

*All release times are DST

*Key events are in bold

GBP/USD for Tuesday, April 9, 2019

GBP/USD April 9 at 11:25 DST

Open: 1.3062 High: 1.3122 Low: 1.3044 Close: 1.3039

GBP/USD Technical

GBP/USD showed little movement in the Asian session. The pair edged higher in European trade but then reversed directions and retracted. The pair has posted small loses in the North American session

• 1.2910 is providing support
• 1.3070 was tested earlier in resistance
• Current range: 1.2910 to 1.3070

Further levels in both directions:

• Below: 1.2910, 1.2841 and 1.2729
• Above: 1.3070, 1.3170, 1.3258 and 1.3362

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