GBP/USD has posted gains in the Tuesday session, continuing the trend seen on Monday. In the North American session, the pair is trading at 1.3162, up 0.34% on the day. On the release front, British CBI Industrial Order Expectations came in at -1, well off the estimate of 5 points. In the U.S, CB Consumer Confidence, jumped to 138.4, crushing the estimate of 132.2 points. On Wednesday, the spotlight will be on the Federal Reserve, which is likely to maintain interest rates at a range between 2.00% and 2.25%.
The Brexit talks continue to sputter, and British Prime Minister May suffered another blow last week, when her proposals on Brexit were rebuffed by European leaders at a summit in Salzburg. Investors and the business sector remain jittery about the British economy, and the concerns are becoming compounded as the days tick closer to Brexit Day next March. The week started off poorly, as CBI manufacturing order expectations came in at -5, compared to an estimate of +1 point.
The U.S and China fired more trade salvos at each other this week, and that could spell bad news for the Japanese yen. On Monday, the U.S imposed tariffs on some $200 billion worth of Chinese goods, while China responded with tariffs of $60 billion on U.S products. There may be more headwinds ahead, as China sharply attacked the U.S, saying it had plunged “a knife to China’s neck” with the new tariffs. The Chinese have canceled trade talks with the Trump administration, and no new talks are likely to be held until the mood improves between the world’s two largest economies. Previous rounds of tariffs between the two economic giants have boosted the U.S dollar, but so far, investors have reacted calmly and have not snapped up the U.S dollar at the expense of other currencies.
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