- The Sterling looks to rebound from daily lows vs. the buck.
- UK manufacturing PMI came in at 52.0 in February.
- US ISM manufacturing should keep the attention on USD.
Today’s softer tone in the British Pound forced GBP/USD to recede further and drop to 3-day lows in the 1.3220 region.
GBP/USD looks to US data
Cable is down for the second session in a row at the end of the week, giving away extra ground after recording fresh multi-month peaks in the mid-1.3300s earlier in the week.
The pair’s upside seems be taking a breather following recent highs while headlines from the Brexit negotiations are giving markets some respite after the latest vote in the UK Parliament and ahead of the crucial votes in mid-March.
Data wise in the UK, February’s manufacturing PMI matched estimates at 52.0, while BoE’s Consumer Credit expanded to £1.095 billion in January and M4 Money Supply rose 0.2% MoM during the same period. Additionally, Mortgage Approvals expanded to 66.77K in January, bettering consensus.
Later in the NA session, the always-relevant ISM manufacturing will be the salient event seconded by inflation figures gauged by the PCE and the final print of Consumer Sentiment.
What to look for around GBP
The British Pound is expected to remain under the microscope in the next weeks in light of key votes in March 12/13/14. Following recent news, the probability of a second referendum has diminished, while a ‘no deal’ scenario remains on the table and the extension of Article 50 is likely, albeit for just 2-3 months. On the broader picture, PM May made clear her intentions to remain in office to deal with the domestic agenda in the next months, opening at the same time another potential source of political uncertainty.
GBP/USD levels to consider
As of writing, the pair is losing 0.18% at 1.3238 and a breach of 1.3217 (high Jan.25) would aim for 1.3127 (10-day SMA) and finally 1.2994 (200-day SMA). On the upside, the next hurdle aligns at 1.3350 (2019 high Feb.27) followed by 1.3362 (monthly high Jul.9 2018) and then 1.3472 (monthly high Jun.7 2018).
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