New York

36912

London

36912

Tokyo

36912

GBP/USD close to 1.30 after reshuffle

14 Feb 2020

Releases by the U.S. Control Group remained flat last month, holding the EUR/USD pair from progressing. The pair trades at around the 1.0850 at the end of the week, marking the lowest handle since April 2017. 

Germany’s 0% growth in the last four months of 2019 did not help the pair’s performance. Economists expected a better fourth quarter, at 0.1%. Furthermore, annual growth failed to reach Berlin expectations, showing just 0.4%. 

The pair now remains above the "Macron Gap" level of 1.0820, at 1.0827.

The European Commission maintained its economic forecast for 2020 and 2021, whilst cautioning a number of eurozone member states could see slower growth.

Corornavirus cases are increasing at a slower rate and most of the Chinese companies resumed work this week. 

Following UK Prime Minister Boris Johnson’s reshuffle, the Cable trades close to the 1.30 handle. Runi Sunak succeeded Sajid Javid as Chancellor of the Exchequer, in hopes of directing fiscal stimulus. 

Johnson and Sunak are expected to scrap deficit obligations set by Javid and increase the debt. 

Plans to increase spending on infrastructure projects mean that Bank of England will not need to provide monetary stimulus. 

The UK will be holding talks with the EU at the beginning of next month in order to try and reach a trade deal. 

After the publication of U.S. retail Sales and Industrial Production data, the USD/JPY pair lost around 15 pips. The pair fell by 0.03% and is being traded at 109.78.