Today’s GBPUSD Fundamental analysis shows that the currency pair is pulling back from its multiday high as traders gear up for the NFP report. Also, the British political plays seem to favor Prime Minister Johnson, while the headlines of Brexit are a few. Greenback bears catch a breath after the most significant monthly declines since January 2018.
01 November 2019, AtoZMarkets –The last month has proven to be the worst for the US Dollar (DXY) Index since January 2018, and traders on the greenback expect early-month catalysts for new directions. In doing so, the GBP / USD reached its highest level since 22 October. The day before consolidates its recent gains at 1.2930 at the time of the publication of the Asian session Friday.
GBPUSD Fundamental Analysis – 01 November 2019
The US dollar (USD) fell across the board on Thursday. Since the third consecutive decline in the US Federal Reserve rate. And receding odds of any strong trade ties between the United States (US). China has joined the mixed data of the United States.
The British pound (GBP), meanwhile, has benefited from the increased chances of the current British Prime Minister Boris Johnson. He keeps his post after a general election in December. The hope that the British Prime Minister has strong ties with the United States. And that he can count on to maintain good trade relations in the future. That has also strengthened the position of the pair.
At the beginning of the day, investors stop extending the previous momentum. since the flow of month-start data has not yet begun. At the time, the risk aversion remains high. Because the United States announced new sanctions against Iran and North Korea in a new series of test-firing.
PMI, Brexit And NFP Statistics
Among the statistics that is featured in today’s GBPUSD Fundamental analysis are the October UK Market Manufacturing Purchasing Manager Index (PMI) and employment statistics. The ISM Manufacturing PMI of the United States will be the key to watch. Regarding data from the United Kingdom, TD Securities states that they expect the manufacturing PMI to grow from 48.3 to 48.9 in October (mkt 48.2). That is supported by inventory building ahead of the Brexit (at the time of the survey) deadline of 31 October. The details will likely continue to be less soft as uncertainty develops. And they will be watching whether the weakness of the labor market. That has been highlighted in September continues in October.
Westpac has a different story, regarding the US Nonfarm Payrolls (NFP), US Oct non-farm payrolls are supposed to grow by 85k with the General Motors strike and reduction in employment rates. The Unemployment Rate is assumed to rise to 3.6% from its lowest level of 50 years, or 3.5%. And the average growth in hourly earnings should stabilize at 3.0% per year after the sharp drop in September, from 3.2% per year to 2.9% per year in August.
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