- Pound (GBP) edgings northwards, although this remains more of a weak US Dollar (USD) story
- Brexit & UK – China tensions cap gains in sterling
- US – China tensions in focus as US closes Chinese consulate in Houston and China closes the US consulate in Chengdu
- US initial jobless claims could so improvements in the job market are stalling
The Pound US Dollar exchange rate is edging higher for a fourth consecutive day on Thursday. The pair settled just 0.02% up in the previous session at US$1.2734. At 06:15 UTC, GBP/USD trades +0.1% at US$1.2749 on persistent US Dollar weakness.
The Pound is mildly higher despite Brexit talks going no where fast and elevated UK – China tensions. The latest round of Brexit talks are coming to an end and once again there has been little progress. EU chief negotiator Michel Barnier and his UK counterpart David Frost are expected to vent her frustrations in a press conference later today.
UK – Chinese relations are also souring quickly after China warned the UK on its path to citizenship to Hong Kong residents as violating international law.
Whilst there is no high impacting UK economic data die for release, investors will look ahead to a speech by Bank of England policymaker Jonathan Haskel to gauge the likelihood to negative interest rates.
The US Dollar has trade on the back foot across the week although it is showing signs of a firming footing on Thursday as US – China tensions escalate, and investor look towards the greenback for its safe haven properties.
The US has given China until Friday to close its consulate in Houston in an unprecedented move highlighting the new low in relations between the two powers. Trump accused the Houston consulate of spying and said that it was possible that other Chinese missions would also be shut down.
China has promised to retaliate announcing that it will close the US consulate in Chengdu. Investors are trying to decide if this increase in tensions is sufficient to upset the upbeat vibe which has been driving the markets higher. Equity market are pointing to a mildly positive start in Europe and the US suggesting that for now the markets are digesting the update and moving forwards.
US initisl jobless claims will move into focus. Analysts are expecting initial jobless claims to remain unchanged at 1.3 million