08.02.2019: GBP maintains momentum and resists USD (EURUSD, GBPUSD, USDCHF)
The euro continues declining today. Nothing can support the single European currency.
The euro-dollar pair is stuck near the level of 1.1340. Both political and macroeconomic factors put it under pressure.
News from Italy absorbed traders’ attention today. This country registered a fall in industrial production for the fourth month in a row. This result signals that the recession can persist.
At the same time, Germany’s trade balance report turned to be more positive, showing a surplus of 19 billion 400 million euros. However, the country’s economy and the region as a whole are weighed down by looming Brexit.
While this issue exerts bearish pressure on the single European currency, the British pounds sometimes even benefits from it. Reportedly, President of the European Commission Jean Claude Juncker plans to meet with British Prime Minister Theresa May in order to discuss resolution of Brexit problems. This news soothed investors’ worries. There emerged a slim ray of hope that the agreed plan on the UK’s exit from the European Union can be adjusted.
Amid that the pound sterling managed to hold steady against the US dollar, hovering near the level of 1.2960. Yesterday Mark Carney said that the Bank of England is ready to raise the interest rate but this move depends on the process of leaving the European Union.
Remarkably, political factors play a significant role in the market. Apart from Brexit, trade relations between the United States and China are also under the spotlight. Reportedly, Donald Trump refused to meet with Xi Jinping in February. Let us remind that the deadline for reaching the trade agreement is the 1st of March.
Dollar bulls left the market amid this news which had an impact on the European trades. In particular, the rally in USD/CHF came to a halt after the pair rose above the parity level. Today it is trading near 1.0020 mark. Macroeconomic news from Switzerland showed that the unemployment level remained unchanged on a seasonally adjusted basis. The non-adjusted indicator rose by 0.1% last month.
Analysts expect the European assets to end this trading week in the negative zone.
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