Weaker recoveries were seen in both the UK manufacturing and service sectors, with the latter recording the greatest loss of momentum since July.
GBP/USD: outlook for April 3-7
2019-11-11 • Updated
It’s official: Brexit has started! The British pound hit its 8-day low at 1.2370 on Wednesday after Prime Minister Theresa May triggered Article 50 of the Lisbon Treaty for moving out of the European Union. A tortuous process of negations with the EU on the terms of trade between Britain and the continent has begun. Towards the end of the week, GBP/USD managed to recoup its losses and surge towards 1.2550. The sterling benefited from US dollar’s weakness that came after Donald Trump said that his administration had started studying the ways to penalize the countries known for their currency manipulations.
The US efforts aimed at boosting the value of other currencies at the expense of greenback might be a major headwind for GBP/USD in the near term. Trump will meet Chinese President Xi Jinping on April 6-7 and the statements after this meeting will have a huge impact on USD.
In addition, next week, we will receive a plenty of economic releases from the both sides of Atlantic. Pay closer attention to the UK manufacturing and construction PMIs, monthly update of the Britain’s manufacturing production figures, as well as the US labor market data (NFP, average hourly earnings and unemployment rate releases are due on April 7). The EU-UK trade negotiations, upbeat US economic data and Fed’s hawkishness will make life harder for the sterling.
As GBP/USD approached resistance line from December 2016, it may feel pressure to visit lower levels. The key supports are lying at 1.2430 (50-day MA), 1.2380 (200-H4 MA) and 1.2300 on the way down to 1.2150 (support line from January lows). On the upside, resistance is found at 1.2630/60 (200-day MA). We don’t recommend targeting higher levels on bullish positions.
What will happen? The Bank of England will present a monetary policy statement on Thursday, August 4 at 14:00 MT (GMT+3)…
The British pound has advanced in the first half of the year, especially against the euro. Will this trend sustain in the second part of 2021?
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates?
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.