GBPUSD Fundamental Analysis Ahead of UK Services PMI

GBPUSD registers modest moves ahead of key data. The lead of the Conservatives in the latest polls has propelled the pair to the top of the ranking over several weeks. Trade / political headlines, US data add the burden of market observers. Here is the GBPUSD Fundamental Analysis of 04 December, 2019

04 December, 2019 | AtoZ Markets – After reaching the six-week high, the GBPUSD is trading at 1.3000 as it approaches the London open on Wednesday. The quote reached its highest level in several weeks on Tuesday after recent polls boosted the chances of the ruling Conservative Party’s victory in the December election. Traders are now gearing up for key data from the United Kingdom (UK) that makes a significant contribution to GDP.

GBPUSD Fundamental Analysis – 04 December 2019

Unlike the polls earlier this week, that showed the Conservative party’s decline on the opposition Labor Party. The recent survey by YouGov and Kantar indicates the increased fame of the Conservatives. Kantar figures show that support for the Conservatives by Prime Minister Boris Johnson rose to 44%. And there was no change of 32% in favor of the Labor Party. Besides, YouGov shows 42% support for the Conservatives against 33% for the Labor Party. That, in turn, signals a nine-point lead by the party led by Prime Minister (PM) Boris Johnson.

US President Donald Trump was in the spotlight as he attended the summit of the North Atlantic Treaty Organization (NATO) in London. President Trump refrained from directly promoting his friend Johnson for leadership in the United Kingdom. The Independent quoted him saying that Boris Johnson would do “a good job” if he were elected. Besides, the American leader’s denial of speculation that the United States would buy the UK’s National Healthcare System (NHS). That may also have satisfied conservative supporters.

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US China Trade Agreement

Elsewhere, the chances of the phase one trade agreement between the United States and China are dwindling day by day. The US president recently reported that the deal might wait until the end of 2020. However, the US House of Representatives announced sanctions against high-ranking Chinese diplomats. On the other hand, the Chinese side keeps their heads up and has helped to drag the market’s tone of risk. Also, the Independent’s news that hundreds of protesters marched to Buckingham Palace to protest US President Trump’s fears may have put additional pressure on business sentiment. As a result, Asian equities and S&P 500 futures remain red.

Traders are gearing up for the United Kingdom’s Purchasing Managers Index (PMI). That is expected to remain unchanged at 48.6, as well as the US Markit Services PMI Index and the ISM Non-Manufacturing PMI Index. While US Markit data could reprint 51.6, its ISM counterpart could jump from 54.7 to 54.5. Also, the change in ADP employment in the United States, forecast at 140K vs. 125K before, maybe an additional burden for market observers.

In addition to the economic calendar, trade/political headlines could also offer increased market volatility and deserve to be observed.

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