GBP/USD is advancing on Tuesday, likely to end the session in green for the first time since last Monday, when the pair edged up 0.04%. Last week was among the worst one in years for the British currency. Currently, one pound buys 1.2955 US dollars, up 0.17% as of 2:39 PM UTC.
Both the US and UK markets closed early on Christmas Eve. Tomorrow, the markets in both countries will be closed all day.
While there are very few fundamentals to assess right now, investors are regurgitating the worries about a potential no-deal Brexit and the sentiment on the US-China trade deal. Last Friday, UK Prime Minister Boris Johnson passed the second reading of the Withdrawal Agreement Bill (WAB), which was amended to rule out any attempts to extend the Brexit transition period beyond December 2020.
The pound is bouncing back against the Greenback in an effort to reverse the bearish trend. However, the chances are that the British currency will update the December low soon.
Just recently, US President Donald Trump announced that he and Chinese counterpart Xi Jinping would have a ceremony to sing the phase one trade agreement between the two countries. He told media:
“We will be having a signing ceremony, yes. We will ultimately, yes, when we get together. And we’ll be having a quicker signing because we want to get it done. The deal is done, it’s just being translated right now.”
Earlier this month, US Trade Representative Robert Lighthizer said that the deal would be inked in the first week of January.
Besides the trade optimism, the USD has been partially supported by housing market data. Yesterday, the Commerce Department said that single-family homes increased last month. Thus, low mortgage rates are doing their job. In November, new home sales rose 1.3% to a seasonally adjusted annual rate of 719,000. October’s sales data was revised down to 710,000 from 733,000 units.
Analysts surveyed by Reuters expected new home sales to increase to a pace of 734,000 units last month.
