The British pound has posted slight gains in the Wednesday session, following strong gains on Tuesday. In North American trade, GBP/USD is trading at 1.3072, up 0.31% on the day. Earlier in the day, the pound touched a high of 1.3080, its highest level since August 4. On the release front, there are no events in the UK. Over in the US, ISM Non-Manufacturing PMI improved to 55.3, but fell short of the forecast of 55.8 points. On Thursday, the US releases employment claims.
One of the biggest losers in the Brexit saga will be the City of London, which stands to lose its status as the primary financial hub in Europe. There are plenty of players across the Channel casting an eye on the spoils after Britain leaves the European Union. Frankfurt and Dublin are the two main contenders, with Paris and Amsterdam are also hoping to lure large financial companies when they downsize operations in London. On Wednesday, Deutsche Bank chief executive John Cryan argued that Frankfurt is ideally suited to take over from London as the financial hub for European banks, saying it has the structures in place to take over from London. Analysts estimate that London could lose up to 30,000 jobs in the financial services sector, with clients moving up to 1.8 trillion euros in assets from the UK to the continent. Germany could gain 30% of these jobs, which would mark a huge post-Brexit boon for the country.
The ongoing crisis over North Korea and its neighbors continues to weigh on the US dollar. Gold and major currencies have benefited from the crisis, as nervous investors look for alternatives to the greenback. The week started with North Korea announcing that it had exploded a hydrogen bomb which could be fitted to an intercontinental ballistic missile. US President Trump responded by announcing that he would increase weapon sales to Japan and South Korea and on Wednesday, South Korea’s President Moon Jae-in warned that the situation risked becoming “uncontrollable”. If tensions between North Korea and the US worsen, the US dollar could continue to lose ground.
Wednesday (September 6)
- 8:30 US Trade Balance. Estimate -44.6B. Actual -43.7B
- 9:45 US Final Services PMI. Estimate 56.8. Actual 56.0
- 10:00 US ISM Non-Manufacturing PMI. Estimate 55.8. Actual 55.3
- 14:00 US Beige Book
Upcoming Key Events
Thursday (September 7)
- 8:30 US Unemployment Claims. Estimate 245K
*All release times are GMT
*Key events are in bold
GBP/USD for Wednesday, September 6, 2017
GBP/USD September 6 at 12:00 EDT
Open: 1.3031 High: 1.3075 Low: 1.3019 Close: 1.3067
- GBP/USD inched lower in the Asian session and edged higher in European trade. In the North American session, the pair moved higher but has retracted
- 1.3058 has switched to a support level following gains by GBP/USD
- 1.3159 is the next resistance line
Further levels in both directions:
- Below: 1.3058, 1.2946, 1.2865 and 1.2767
- Above: 1.3159, 1.3267 and 1.3347
- Current range: 1.3058 to 1.3159
OANDA’s Open Positions Ratio
GBP/USD ratio remains unchanged this week. Currently, long positions have a slender majority (52%), indicative of slight trader bias towards GBP/USD continuing to move upwards.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.