- Brexit uncertainties, dovish comments by BoE’s Saunders took its toll on the British pound.
- Some fresh USD selling extended some support to GBP/USD and helped limit the downside.
- The USD bulls failed to gain any respite from Thursday’s mixed US macroeconomic releases.
The GBP/USD pair managed to reverse a mid-European session dip to an intraday low level of 1.2233, albeit lacked any strong follow-through. The pair was last seen trading in the neutral territory, around the 1.2265 region and had a rather muted reaction to the US macro data.
Against the backdrop of fresh Brexit jitters, some dovish comments by the BoE MPC member Michael Saunders took its toll on the British pound prompted some intraday selling around the GBP/USD pair. Saunders argued that it was less risky to ease the policy too much in the current environment and also did not rule out the possibility of negative interest rates.
However, the emergence of some fresh selling around the US dollar helped limit further losses, rather assisted the pair to gain some positive traction. The greenback remained depressed through the early North American session and failed to gain any respite from Thursday’s mixed US economic releases.
The US first-quarter GDP was revised lower to show a contraction of 5% as compared to 4.8% estimates earlier and the Initial Weekly Jobless Claims came in at 2.123 million as against 2 million expected. The negative growth and employment reports, to a larger extent, were negated by a smaller-than-anticipated fall in Durable Goods Orders data and hence, did little to provide any meaningful impetus.
It will now be interesting to see if the pair is able to gain any meaningful traction or continues with its subdued/range-bound trading action as the focus remains on developments surrounding the US-China disputes. The incoming headlines will play a key role in influencing the broader market risk sentiment and produce some meaningful trading opportunities.
It is worth recalling that the US President Donald Trump has warned a strong reaction to China’s planned national security law for Hong Kong. Adding to this, the US Secretary of State Mike Pompeo on Wednesday said that Hong Kong was no longer autonomous from China and does not qualify for its special status under the US law. Meanwhile, China threatened to retaliate with countermeasures against any US actions.
Technical levels to watch
Share
