GBP/USD ended the week on a whimper and the drifting has continued in the Monday session. In European trade, GBP/USD is trading at 1.2921, up 0.07% on the day.
Manufacturing PMIs Could Shake up Sleepy Pound
The spotlight will be on manufacturing reports on Monday, with the release of Manufacturing PMIs in the U.K. and the United States. Any unexpected readings from these key releases could trigger some movement from the pound, which has been flat since late last week.
The British manufacturing sector has been struggling, with Manufacturing PMI readings mired below the 50-level, which separates contraction from expansion. In October, the PMI improved to 49.6, but is expected to dip to 48.3 in November. The story is practically a carbon copy in the U.S., with Manufacturing PMI pointing to contraction over the past three months. The estimate for November stands at 49.2 pts.
British Election Polls Show Tight Race
Only a week ago, Boris Johnson and his Conservatives had a comfortable 11 point lead in the polls ahead of Labour. That lead has shrunk to just 6 points in the latest polls, which could translate into neither party winning a majority. With less than two weeks until Election Day, the uncertainty could weigh on the British pound.
GBP/USD appears content to hover at the 1.2920 line, which has been the case since late last week. The 1.3000 line, which has psychological significance, appears safe for now. It was last tested on October 21st. On the downside, we find support at 1.2800. This is closely followed by the 50-EMA line at 1.2790.
Pacific Currencies – Summary
USD/CNY is currently trading at 7.0432, up 0.18% on the day. The yuan is slightly lower, despite a positive reading from Caixin Manufacturing PMI. The index posted its fourth straight reading above the 50-level, which separates contraction from expansion. The November figure of 51.8 beat the forecast of 51.1 pts.
AUD/USD has posted small gains on Monday, trading at 0.6780, up 0.29% on the day. The Aussie received a boost from Chinese Caixin Manufacturing PMI, which ticked up to 51.8, its highest level since December 2016. This outweighed soft readings from Building Approvals and Company Operating Profits, both of which recorded declines. On Tuesday, the RBA is expected to hold rates at 0.75%.
NZD/USD has posted considerable gains on Monday. Currently, the pair is trading at 0.6461, up 0.46% on the day. The NZ dollar benefited from a positive Chinese manufacturing report. As well, the Overseas Trade Index gained 1.9%, its strongest gain since mid-2017.
This article was originally posted on FX Empire
More From FXEMPIRE:
- Bitcoin Cash – ABC, Litecoin and Ripple Daily Analysis – 02/12/19
- EUR/USD Mid-Session Technical Analysis for December 2, 2019
- Price of Gold Fundamental Daily Forecast – Strong China Factory Data Dampens Concerns Over Slowing Global Economy
- EUR/USD Slowly Growing
- USD/JPY Fundamental Daily Forecast – Boosted by Demand for Risk, Jump in Treasury Yields
- The Narrative About Gold is Changing Again