- GBP/USD stays heavy near the intraday low close to 1.3320.
- Brexit pessimism, comments from BOE policymakers snapped three-day winning streak on Wednesday.
- US dollar’s sustained recovery exerts additional downside pressure.
- Key activity numbers may offer intermediate direction ahead of Friday’s NFP.
GBP/USD drops to 1.3328, down 0.17% on a day, while heading into the London open on Thursday. In doing so, the Cable extends the previous day’s losses, piled mainly due to the downside comments from the BOE members, Brexit pessimism and the broad US dollar recovery. The pair traders currently await the final reading of the UK Services PMI and initial estimations of US ISM Services PMI, together with the second appearance of the BOE boss.
On Wednesday, the EU’s Chief Brexit Negotiator Michael Barnier showed readiness to ease fisheries demand after saying that the UK hasn’t engaged in the key Brexit conditions. On the other hand, a lobby group from Ireland wants Brexit preparations marked in November month’s budget.
Although BOE Governor Andrew Bailey said that inflation expectations have been pretty stable, other board members like Deputy Governor Dave Ramsden and policymaker Gertjan Vlieghe failed to keep up the optimism while showing readiness to ease if needed. This pushes traders to look for details of the BOE members' mixed statements flashed the previous day. As a result, the BOE’s Bailey will be watched carefully at 14:00 GMT.
Additionally, UK Services PMI for August, expected 60.1, will precede the US ISM Services PMI, forecast 57 versus 58.1 prior, to offer intermediate direction to the pair.
On a different page, Chancellor Rishi Sunak said, as per Reuters, that Britain would need to make its public finances sustainable over time, but he did not comment on reports of planned tax rises, saying his first task was jobs and driving a recovery.
It’s worth mentioning that the US dollar’s sustained run-up, despite downbeat ADP Employment Change, keeps the pair bulls challenged near the multi-month high. Should the upcoming data print USD-positive outcomes, odds of revisiting the early-August lows can’t be ruled out.
Failures to keep the yearly high direct sellers towards August 19 top surrounding 1.3265 but the 21-day EMA of 1.3177 is likely to restrict the quote’s further downside. Meanwhile, any upside below the December 2019 peak of 1.3515 will be less lucrative.