Both GBPEUR and GBPUSD continue to trade within their micro ranges as this week draws to a close. August is typically a quieter month for trading and liquidity and this month has been no different.
Overnight we saw industrial production in China come in at 4.8% versus the 5.1% expectation. Retail sales for July missed the beat and printed a negative 1.1% reading suggesting their has been a wider global slowdown of spending. This is likely to be the case for the retail data due out of the US at 12:30pm. Sporadic increases in cases and the end of employment benefits is unlikely to spur cash transactions.
Eurozone GDP predictions were spot on, therefore allowing the single block currency to trade flat against the Pound and Dollar despite showing a 15% fall in yearly GDP.
US and China officials will meet tomorrow via video conference to review the almost forgotten phase-1 trade deal. This will also be the perfect opportunity to discuss, negotiate and align other areas of disagreement that have gained traction in the media. The market will be poised for negative headlines come market opening and will likely set the risk tone for commencing week.
Have a great weekend.
Author: Alistair Hutson, Senior Relationship Manager
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