Pound Climbs On Trade Optimism
01 May 2019 - 3:47PM
RTTF2
The pound was higher against its most major counterparts in the
European session on Wednesday, as U.K. markets advanced on optimism
about U.S-China trade talks and strong earnings from Apple
overnight.
Apple's earnings and revenue estimates for the second quarter
topped forecasts, sending its stock surging in after-market trading
in the U.S. Trade talks between China and U.S. began in Beijing,
with the U.S. aide describing as it as "productive," as both seek
to end the spat.
US Treasury Secretary Steven Mnuchin wrote on twitter that US
trade negotiators concluded productive meetings with China's Vice
Premier Liu He and that decisive talks will be held in the U.S.
next week.
The Federal Reserve is widely expected to leave interest rates
unchanged when it ends a two-day policy meeting later in the
day.
Traders are likely to keep a close eye on the accompanying
statement and Fed Chairman Jerome Powell's subsequent press
conference for clues on the outlook for interest rates.
Survey data from the Nationwide housing society showed that UK
house prices rose at the fastest annual pace in five months in
April, but inflation remained subdued.
The house price index rose 0.9 percent year-on-year following a
0.7 percent increase in March. Economists had expected the
inflation rate to remain unchanged.
Survey data from IHS Markit showed that UK manufacturing
expansion slowed to a two-month low in April amid a decline in
export business and an easing in the robust pace of
stock-building.
The IHS Markit/CIPS Purchasing Managers' Index, or PMI, fell to
53.1 in April from March's 13-month high of 55.1. The score was in
line with economists' expectations.
The currency has been trading higher against its major
counterparts in the Asian session, barring the euro.
The pound strengthened to more than a 2-week high of 1.3074
against the greenback, from a low of 1.3024 hit at 5:00 pm ET. The
pound is seen finding resistance around the 1.32 level.
The pound appreciated to 145.70 against the yen, its highest
since April 18. Next key resistance for the pound is seen around
the 147.00 level.
The pound climbed to 0.8587 against the euro, a level unseen
since April 5. On the upside, 0.84 is possibly seen as the next
resistance level for the pound.
On the flip side, the pound pared some of its early gains
against the franc with the pair trading at 1.3285.This follows a
high of 1.3304 touched at 3:00 am ET. The pound is poised to test
support around the 1.30 level.
Looking ahead, at 8:15 am ET, ADP private payrolls data for
April is scheduled for release.
In the New York session, U.S. construction spending for March
and ISM manufacturing for April will be released.
The Fed announces its interest rate decision at 2:00 pm ET.
Economists widely expect the fed funds rate to remain in a range
between 2.25 percent and 2.50 percent.
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