Traders who expected the British currency to advance have been disappointed. The pound sterling got back to the level logged before the parliamentary elections results. The pound/dollar pair declined below the support level at 1.3264 and by the time the video was released it was trading near 1.3200. Traders have finally focused on news about Brexit. Boris Johnson is preparing the withdrawal agreement bill. According Johnson’s plan, Britain is to leave the EU by the 31st of December, 2020 on rather strict terms.
Today’s data on the British labor market also provoked the pound’s drop. According to the previous estimates, the number of people claiming unemployment benefits increased by 28,800 from the previous month. Economists had expected much more positive data. The report also said that on a yearly basis the wages growth slowed down to 3.2% in three months.
On Thursday, markets will focus on the Bank of England key rate decision. It is supposed that the benchmark interest rate will be unchanged. For a long time, the monetary policy Committee supposed uncertainty over Brexit to be the main risk for the country’s economy. But now, the central bank should switch to the macroeconomic reports that show rather negative data. That is why on Thursday, there will be one of the most interesting and exciting meeting.
The eurozone also presented weak economic figures. Traders are waiting for the ECB president’s speech. The euro/dollar chart is reflecting traders’ optimism. At the moment, the pair is testing the resistance level at 1.1165. If the pair breaks this level, it may climb to 1.12 or even higher. In this case, it is recommended to close long positions.
That’s all for now. We wish you profitable trading! See you soon!
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