The British pound is unchanged in the Tuesday session. In North American trade, GBP/USD is trading at 1.3389, up 0.05% on the day. On the release front, Britain released key employment numbers. Wage growth edged down to 2.5%, matching the forecast. Unemployment claims dropped by 7.7 thousand, much better than the estimate of a gain of 11.3 thousand. The unemployment rate remained pegged at 0.3% for a third straight month. In the US, consumer inflation numbers were within expectations. CPI remained pegged at 0.2% and Core CPI edged up to 0.2%, just above the forecast of 0.1%. On Wednesday, the US will release PPI reports and the Federal Reserve is expected to raise interest rates to a range between 1.75% and 2.00%. On Tuesday, there are key indicators on both side of the pond. The U.K releases inflation indicators, led by CPI, and the U.S will publish PPI reports.
Wage growth in the U.K continues to lag behind inflation, which is hampering consumer spending. The labor market remains tight, but surprisingly, this has not translated into stronger wages for British workers. Where does this leave the Bank of England? Policymakers will remain hesitant to raise interest rates, unless inflation reverses its downward trend and key economic indicators move higher. The BoE will convene on June 21 for a policy meeting, and the bank is expected to hold the benchmark rate at 0.50 percent.
The leaders of the U.S and North Korea met in a historic summit in Singapore on Tuesday. The joint statement put out by leaders was short on details, but President Trump said that President Kim Jong-un had reaffirmed its full commitment to complete denuclearization of North Korea. Although the crucial issue of verification was not addressed, there’s no denying that tensions have significantly eased and that the summit could mark a first step in bringing peace to the Korean peninsula. As close neighbors of the North Korean regime, South Korea and Japan will be watching these new developments closely. North Korean missiles represent a significant threat to Japan’s security, and Japan will want to see significant de-nuclearization steps by North Korea before the U.S removes any troops from South Korea.
Tuesday (June 12)
Wednesday (June 13)
*All release times are DST
*Key events are in bold
GBP/USD for Tuesday, June 12, 2018
GBP/USD June 12 at 11:25 DST
Open: 1.3382 High: 1.3419 Low: 1.3342 Close: 1.3389
GBP/USD inched lower in the Asian session. In European trade, the pair gained ground but then gave up most of those gains. GBP/USD posted small losses in North American trade but has recovered these losses
Further levels in both directions:
OANDA’s Open Positions Ratio
GBP/USD ratio is almost unchanged in the Tuesday session. Currently, long positions have a majority (67%), indicative of trader bias towards GBP/USD reversing directions and moving upwards.
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