GBP/USD – Pound Steady, Investors Eye Housing ReportsThe British pound is steady at the start of the week. The Australian and New Zealand dollars are trading at multi-week lows, as the China coronavirus has raised investor risk apprehension.
GBP/USD is trading sideways on Monday. Currently, the pair is trading at 1.3082, up 0.14% on the day. The pound managed to post slight gains over the week, its first winning week of the year. On the economic front, we’ll get a look at mortgage approvals by major British banks and the Nationwide House Price Index, both of which are expected to accelerate.
Manufacturing PMI Points to Contraction
The week wrapped up with the release of initial PMIs for January. The manufacturing PMI improved to 49.8, compared to 47.5 in the final December PMI. Still, this points to contraction in the manufacturing sector, which continues to struggle. The services PMI indicated expansion, with a reading of 52.9 points. This was up nicely from the final PMI in December of 50.0 points. As well, this figure beat the forecast of 51.1 points.
The Bank of England will be carefully monitoring these key releases. Bank policymakers have been hinting at a rate cut when they meet to set the benchmark rate Thursday and the weak state of the manufacturing sector remains a concern.
GBP/USD is range-bound on Monday. The line of 1.3100 remains relevant and is currently an immediate resistance line. This is followed by resistance at 1.3150. On the downside, there is major support at the round number of 1.3000.
Pacific Currencies – Daily Summary
USD/CNY declined 1.1% last week, its sharpest one-week loss since August. This was mainly a result of the China coronavirus, which has badly shaken sentiment towards the yuan. Currently, the pair is trading at 6.9363, up 0.02% on the day. Later in the day, China releases the CB Leading Index.
AUD/USD – Aussie Falls to 7-Week Low
AUD/USD ended the week with losses and has continued its losing ways on Monday. The pair is currently trading at 0.6794, down 0.46% on the day. AUD/USD broke below the 0.68 line in the Asian session, for the first time since December 2. The currency remains under pressure due to the China coronavirus, which has sapped risk appetite. Later in the day, Australia releases NAB Business Confidence.
NZD/USD has started the trading week with considerable losses. Currently, the pair is trading at 0.6572, down 0.53% on the day. In the Asian session, the pair touched a low of 0.6569, marking a 3-week low. There are no New Zealand events on the calendar.