- GBP/USD pauses three-day losing streak.
- Optimism surrounding domestic employment, among executives help recover Thursday’s losses.
- UK PM Johnson’s Brexit Bill gets through the House of Commons, Erasmus+exchange scheme, extra offs to UK MPs occupy positive stands.
GBP/USD recovers the latest losses while taking the bids to 1.3080 ahead of the London open on Friday. The pair dropped the previous day after the BOE Governor Mark Carney’s dovish appearance. The latest headlines concerning Brexit, domestic catalysts seem positive. Traders will keep eyes on political news for immediate direction ahead of the US employment data.
The BOE’s Caney triggered the pair Cable’s declines while suggesting nearly 250 pips of rate cuts going forward. The policymaker also said negative about the latest growth forecast and policy risks. Also increasing the pessimism were comments from the EU’s chief Brexit negotiator Michel Barnier who warned the UK over leaving without any deal if it sticks to the timeline of 31-December-2020.
Following the declines, the Cable marked recovery as the UK PM Boris Johnson’s Withdrawal Agreement Bill (WAB) passed the House of Commons by 330 votes to 231 – a majority of 99 votes. The Bill will now reach the House of Lords for scrutiny during the next week.
The bill passed without any changed suggested by the opposition members, not even the protections for child refugees. However, the government’s commitment to maintaining the Erasmus+ program, which funds opportunities for young people to train and study across Europe, seems to please the student fraternity. Further, a second-tier employment indicator and a survey from Deloitte flashed positive signs for the British pound (GBP) buyers. Additionally, the UK Memmbers of the Parliaments (MPs) will have an extra month off as per the new timetable and so fewer questions for the UK PM during the year 2020.
Even so, the market’s risk tone stays sluggish, with the US 10-year treasury yields taking rounds to 1.86%, amid the UK-Canada allegations that Iran was the culprit behind the Ukrainian plane crash.
Looking forward, investors will pay close attention to the political headlines amid the US-Iran tension, which is receding so far. However, the major focus will be on the US employment data for December, Nonfarm Payrolls (NFP) to be very specific. Forecasts favor no change in the US Hourly Earnings and Unemployment Rate figures of 3.1% and 3.5% respectively. Though, NFP is likely to soften to 164K from 266K prior.
An upward sloping trend line since November 08, at 1.2965, is on sellers’ radar unless prices successfully trade beyond a 21-day SMA level of 1.3103.