GBP/USD extends losses to 1.3115 following dovish comments from BOE’s Carney
- GBP/USD keeps the losses flashed the previous day as BOE’s Carney signal further rate cuts.
- UK MPs debate on PM’s Withdrawal Agreement Bill, MEPs will express disappointment from British stance on EU citizens.
GBP/USD steps into Wednesday’s Asian session by stretching the previous day’s losses to the low of 1.3114, at 1.3117 by the press time. The pair declined from the high of 1.3213 on Tuesday amid broad USD recovery, political jitters in the UK. That said, the pair’s latest weakness could be attributed to the Bank of England (BOE) Governor’s dovish comments.
The BOE’s Governor Mark Carney recently crossed wires while being interviewed by the Financial Times (FT). The UK’s central banker emphasized that the BOE can still cut the rates close to zero.
Read: BoE Carney: Global economy is headed for a liquidity trap – FT
The British Members of the Parliaments (MPs) returned from the Christmas break on Tuesday and began debating on the UK PM Boris Johnson’s EU Withdrawal Agreement Bill. The bill was passed during the later part of 2019 and is back to the Commons for reconsideration prior to making its way forward towards being the law. Although the Swiss National Party (SNP) and the Labour Party tried hard with harsh amendments during the debate, they might have to witness a disappointment after the voting on Thursday considering the Tory majority.
Elsewhere, the Guardian relied on a leaked document to spread the news that the Members of European Parliament (MEPs) will express its “grave concern” about the attitude of Boris Johnson’s government to the 3.3 million EU citizens living in the UK following threats of deportation made by a British minister. Furthermore, the British watchdog, the Regulatory Policy Committee (RPC), rapped UK PM Johnson’s party for failing to assess the full impact of his Brexit deal, as per the UK Mirror.
On the other hand, the US dollar manages to recover amid better than forecast prints of the US ISM Non-Manufacturing PMI and Factory Orders. Also supporting the greenback were sighs of relief amid the absence of the US-Iran war.
Market players will now keep an eye over the trade/political headlines as the UK PM and the European Council President Von der Leyen Commission will see each other and might discuss Brexit during their first confrontation.
Technical Analysis
Prices fail to overcome short-term symmetrical triangle, currently between 1.3100 and 1.3200, a break of which could recall either the high of 2020, at 1.3280, or 50-day SMA level of 1.3012 depending upon the side of the break.