London, U.K. – The GBP/USD is still feeling the pressure as it slides to 1.2880 ahead of Tuesday’s opening bell. It’s the third consecutive day that the trading pair has floundered as doubts about the upcoming snap elections continues to swirl.
The GBP/USD initially found support close to 1.2800 and even pushed above the 1.2950 resistance. It just couldn’t break past 1.3000 but developed a high around 1.2975. However, it has started sliding and has corrected lower against the USD.
Concerns about current UK Prime Minister Boris Johnson’s ability to win the December election has certainly impacted the GBP/USD.
The positive statements given by US President Donald Trump regarding the roll-back of some of the tariffs the US imposed on China earlier and the possibility of a US-China deal has given the pair a boost. However, the political maneuverings that’s happening in the United Kingdom is placing pressure on the GBP/USD and exacerbating its weakness.
It appears that UK citizens will be experiencing more hardship, what with a member of the Labor Party now the speaker of the House of Commons. There’s also the lingering question about the PM’s alleged part in repressing reports regarding Russian interference in British politics.
Brexit leader Nigel Farage’s recent campaign to put almost 600 candidates for December’s snap election is also contributing to the general air of pessimism. Farage’s move is allegedly designed to slash Conservative votes and give him more say in the negotiations.
The United Kingdom Construction Purchasing Managers Index (PMI) for October has been released by Markit Economics and the Chartered Institute of Purchasing & Supply.
The market was expecting an increase from 43.3 to 44, but the result was higher. The Construction PMI rose to 44.2, indicating that construction output went down at a slower pace.
Even though the October Services PMI will be the focus of GBP traders, the United States’ economic calendar will place a spotlight on ISM Non-Manufacturing PMI, trade balance, and second-level jobs information.
TD Securities said they were looking for the services PMI to slightly sink at 49.2 last month. And while the manufacturing PMI did bounce a little on its inventory creation before the October 31 deadline, the services PMI had the worst performances out of the three March PMIs.
Meanwhile, Westpac claimed October’s non-manufacturing ISM survey is the focus of US data. The general agreement is for the overall index to improve from 52.6 to 53.4. It also mentioned that the US trade balance for September was also due and is expected to be about -$53 billion.