A new week has dawned and it does not look that great for the pound. Prime Minister Theresa May is facing a small revolt within her Conservative Party and she wants to discuss Brexit with the opposition. It will be interesting to see if the Labour Party will cooperate and what suggestions they bring to the table.
Yet uncertainty about the future of Brexit isn’t the only pressure point. The recent past also has implications.
Two surveys show a slowdown. Big British firms are likely to curtail investment plans due to uncertainty. This is according to a survey by Deloitte. Optimism at large companies fell sharply in the second quarter.
They explain that the survey has proven to be a good predictor for the official investment intentions survey by the Bank of England.
And also the consumer is not really trigger happy. We already know that spending has significantly slowed down in 2017 and according to Visa, it has even dropped in June. They say it is the weakest quarter in nearly four years and year over year, spending dropped.
The higher cost of living with slowing wage growth are squeezing households, according to the credit card company.
GBP/USD
Pound/dollar is slightly lower on the day, trading around 1.2870. It is gradually moving away from the highs of over 1.30 that it has seen after Carney’s hawkish speech.
Resistance awaits at 1.29 and 1.2980. Support is at 1.2820 and 1.2775.
More: GBP, JPY: Balanced Risks S/T; Buy A GBP Dip & Sell A JPY Rally L/T – BofAML
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