Good morning, please see today’s entry to our Daily FX Market Commentary.
The USD’s relentless march this week did finally meet some resistance during play yesterday, facing however, only a slow retreat. Given the improvement in some economic data from the States and the fact that the UK did not exceed (but did indeed hit) GDP forecasts, it is likely the resistance came from investors assessing fair value for the GBPUSD at or around current levels. Further news will guide the currency pair from here, of which there is plenty today.
The high of the day was 1.3996 and the low was 1.3911, we are trading right now at exactly 1.4000.
On the news front for the US today:
- GDP figures forecast to shrink
- Personal consumer spending information, again forecast to shrink
- The measure of difference between imports and exports, forecast to be largely flat
It’s possible we might even see a further slight retreat of the Dollar today.
The EUR lost only a very small amount of ground against the GBP yesterday, starting the day around 1.2640 and ending on 1.2665. At the moment we have a rate of 1.2686 so that is still gently pushing back up against the Euro.
The Eurozone inflation figure disappointed and this will add pressure on the European Central Bank to examine further supportive actions, this could potentially open up the EUR for weakness in the medium term.
Only really a consumer confidence marker from the Eurozone today is of any particular importance, it’s forecast to improve but this may not alter the course of the currency.
Still British-European Union issues dominate the media as more and more bodies and leaders enter the debate, casting their vote one way or another. Much of what is published seems to conclude that business leaders are inclined toward leaving the EU.
The GBP did recover ever so slightly today and I wouldn’t be surprised if this continued today at a similar slow speed as we expect weaker data from the US, could possibly see some profit taking as traders close positions for the weekend and some indications that other risks have been largely absorbed.