GBP/USD is slightly higher in the Tuesday session. In North American trade, the pair is trading at 1.2883, up 0.23% on the day. The pound remains under pressure, as the currency has dropped 2.3% since January 28. On the release front, the sole data event was U.S. JOLTS Job Openings. The indicator sparkled with a gain of 7.34 million, well above the forecast of 6.84 million. On Wednesday, the focus will be on consumer inflation, with the release of British and U.S. CPI reports.
It was a dismal start to the week for British indicators, which pointed to a slowdown in the economy in the fourth quarter. Preliminary GDP for Q4 posted a weak gain of 0.2%, compared to 0.6% in the third quarter. The economy expanded 1.4% in 2018, its lowest level since 2012. The catalysts behind the weak numbers are the uncertainty over Brexit, as well as weaker global growth. Business investment declined for a second straight month, as the uncertainty over the British economy has dampened sentiment among investors. The pound is under pressure and has sagged 1.9% in February. With Prime Minister May struggling to pass a Brexit deal through parliament and the threat of further U.S tariffs against China in early March, the pound could be facing further headwinds.
The Federal Reserve hit the rate trigger four times in 2018, as the Fed responded aggressively to a red-hot U.S. economy. However, the global trade war and slower U.S. growth has resulted in the Fed lowering its forecast to two hikes in 2019. This could be overly optimistic, as the rate futures market has forecast no rate hikes until 2020. On Monday, Fed President Michelle Bowman said that she was satisfied with current monetary policy, and that the labor market and inflation levels had put the economy in a “good place”.
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Tuesday (February 12)
- 8:00 BoE Governor Carney Speaks
- 10:00 US JOLTS Job Openings. Estimate 6.84M. Actual 7.34M
- 12:45 Fed Chair Powell Speaks
- 19:30 US FOMC Member George Speaks
Wednesday (February 13)
- 4:30 British CPI. Estimate 1.9%
- 8:30 US CPI. Estimate 0.1%
- 8:30 US Core CPI. Estimate 0.2%
*All release times are EST
*Key events are in bold
GBP/USD for Tuesday, February 12, 2019
GBP/USD February 12 at 11:25 EST
Open: 1.2861 High: 1.2896 Low: 1.2833 Close: 1.2891
GBP/USD was flat in the Asian session. The pair posted slight losses in European trade but then recovered. GBP/USD has ticked higher in North American trade
- 1.2851 is providing support
- 1.2910 is a weak resistance line
- Current range: 1.2851 to 1.2910
Further levels in both directions:
- Below: 1.2851, 1.2729 and 1.2615
- Above: 1.2910, 1.3070, 1.3170 and 1.3258
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