- The lack of progress in Brexit talks prompted some fresh selling around GBP/USD on Thursday.
- Upbeat UK industrial/manufacturing data, in-line UK GDP print failed to impress the GBP bulls.
- A subdued USD price action also did little to provide any meaningful impetus to the major.
The GBP/USD pair remained depressed below mid-1.3300s and moved little following the release of top-tier UK macro data.
The pair came under some renewed selling pressure on Thursday and extended the previous day’s retracement slide from weekly tops, around the 1.3475-80 region. The latest optimism over a last-minute Brexit deal faded quickly after a key summit between the UK Prime Minister Boris Johnson and the European Commission President Ursula von der Leyen ended without any concrete progress.
The top officials agreed to delay a firm decision about the future of Brexit talks until Sunday and added to uncertainty. Meanwhile, a senior UK source told the media on Wednesday that very large gaps remain between the two sides and it is still unclear if these can be bridged. This, in turn, was seen as a key factor that took its toll on the sterling and exerted some pressure on the GBP/USD pair.
The GBP bulls seemed rather unimpressed by Thursday’s better-than-expected UK Industrial and Manufacturing Production figures for October, which increased by 1.3% and 1.7%, respectively. Meanwhile, the UK GDP growth matched consensus estimates and came in to show that the economy expanded by 0.4% in October as compared to 1.1% in the previous month. Separately, the UK trade deficit jumped to £12 billion during the reported month as against £9.6 billion expected and £9.34 billion previous.
On the other hand, the US dollar lacked any firm directional bias amid doubts on whether the Republicans and Democrats can reach a consensus over the proposed relief package. A subdued USD price action did little to provide any meaningful impetus to the GBP/USD pair, with the sentiment surrounding the sterling turning out to be an exclusive driver of the intraday movement.
Market participants now look forward to the US economic docket, highlighting the release of the latest consumer inflation figures and Initial Weekly Jobless Claims. The data, along with the US stimulus headlines, will influence the greenback. Apart from this, the incoming Brexit-related headlines will further contribute to produce some short-term trading opportunities around the GBP/USD pair.
Technical levels to watch
Share
