U.S. Markets close in 6 hrs 19 mins

GBP/USD – Pound Rises to 2-Week High, Aussie and NZ Dollar on the Move

Kenny Fisher

GBP/USD has posted slight gains for a third successive day and is currently at its highest level since November 18th. In European trade, GBP/USD is trading at 1.2970, up 0.24% on the day.  On the economic front, BRC Retail Sales Monitor recorded a sharp drop of 4.9%, compared to the estimate of -0.4%. This points to weak consumer demand, which is bad news for the British economy.

PMIs in the Spotlight

The British manufacturing sector has been struggling, with Manufacturing PMI readings mired below the 50-level, which separates contraction from expansion. In October, the PMI improved to 49.6, but slipped lower in November, with a reading of 48.9. Still, this figure beat the forecast of 48.3 pts. Next up is Construction PMI, which has also been pointing to contraction. The PMI came in at 44.2 in October and the estimate for November stands at 44.5 pts.

British Election Polls Show Tight Race

Only a week ago, Boris Johnson and his Conservatives had a comfortable 11-point lead in the polls ahead of Labour. That lead has fallen to 6-9 points in the latest polls, which could translate into neither party winning a majority. With less than two weeks until Election Day, the uncertainty of a tight race could weigh on the British pound.

Technical Analysis

GBP/USD is moving closer to the 1.300 level, which has psychological significance. This line was last tested on October 21st and a break above this line could give the pound additional momentum. On the downside, 1.2925 has switched to a support role. This is followed by the 50-EMA line at 1.2765.

GBP/USD 1-Day Chart

Pacific Currencies – Summary

USD/CNY

USD/CNY is currently trading at 7.0456, up 0.11% on the day. There are no Chinese events on the schedule. On the technical side, the 50-EMA is touching the candlesticks, which could signal a change in the trend.

AUD/USD

AUD/USD has gained over 1.0% this week, as the pair is basking in a 3-week high. Currently, the pair is trading at 0.6850, up 0.48% on the day. The RBA maintained the benchmark rate at 0.75%, as expected. The Aussie received a boost from a strong current account surplus, which widened from A$5.9 billion to 7.9 billion. This was the second straight surplus after a long string of deficits. We could see more movement from the Aussie, with the release of GDP on Wednesday.

NZD/USD

NZD/USD has followed the Aussie and has racked up gains of 1.5% so far this week. Currently, the pair is trading at 0.6523, up 0.32 on the day. On Wednesday, New Zealand releases ANZ Commodity Prices.

This article was originally posted on FX Empire

More From FXEMPIRE: