- Fears of hard Brexit keep driving the British Pound (GBP) downward despite upbeat employment data at home.
- News of US-Japan trade deal, Fitch rating and recent risk-off also weigh on the pair.
- British inflation numbers, trade/political headlines are in the spotlight for now.
Despite witnessing a mild pullback from 6-month low, GBP/JPY carries its weakness as it takes the rounds to 134.28 during early Wednesday.
In addition to constant uncertainty factor surrounding the Brexit, recent improvement of the Japanese Yen (JPY) also weighs on the prices.
During his latest public appearances, Boris Johnson, who leads the UK Prime Minister’s (PM) race, continues to disrespect the EU’s previous deal concerning the Irish border issue. Mr. Johnson also raised prospects of the early general election, if elected, to remove the opposition Labour party leader Jeremy Corbyn’s political dominance.
It should also be noted that upbeat reports from the UK employment front and absence of any fresh bearish threats from the Bank of England (BOE) Governor Mark Carney were largely being ignored by the British Pound (GBP) traders.
On the contrary, the JPY benefited from the latest news of the Fitch affirming Japan’s credit rating ‘A’ amid stable outlook and the US and Japan trade deal. Also adding the Yen strength could be the doubts relating to the US-China trade deal and the political tussle between the US and Iran.
Global barometer of risk sentiment, the US 10-year treasury yield, declines nearly 2 basis points to 2.103% by the press time.
While Japanese economic calendar has no major data/events scheduled for release from now, investors can concentrate on macro news in addition to the UK Consumer Price Index (CPI) data for fresh impulse.
Technical Analysis
Chances of pair’s drop to January month low surrounding 131.80 remains on the cards as far as the quote traders beneath 61.8% Fibonacci retracement of 2016 – 2018 upside, at 136.10 now.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD: The first upside target is seen at the 1.0710–1.0715 region
The EUR/USD pair trades in positive territory for the fourth consecutive day near 1.0705 on Wednesday during the early European trading hours. The recovery of the major pair is bolstered by the downbeat US April PMI data, which weighs on the Greenback.
GBP/USD rises to near 1.2450 despite the bearish sentiment
GBP/USD has been on the rise for the second consecutive day, trading around 1.2450 in Asian trading on Wednesday. However, the pair is still below the pullback resistance at 1.2518, which coincides with the lower boundary of the descending triangle at 1.2510.
Gold price struggles to lure buyers amid positive risk tone, reduced Fed rate cut bets
Gold price lacks follow-through buying and is influenced by a combination of diverging forces. Easing geopolitical tensions continue to undermine demand for the safe-haven precious metal. Tuesday’s dismal US PMIs weigh on the USD and lend support ahead of the key US data.
Crypto community reacts as BRICS considers launching stablecoin for international trade settlement
BRICS is intensifying efforts to reduce its reliance on the US dollar after plans for its stablecoin effort surfaced online on Tuesday. Most people expect the stablecoin to be backed by gold, considering BRICS nations have been accumulating large holdings of the commodity.
Three fundamentals for the week: US GDP, BoJ and the Fed's favorite inflation gauge stand out Premium
While it is hard to predict when geopolitical news erupts, the level of tension is lower – allowing for key data to have its say. This week's US figures are set to shape the Federal Reserve's decision next week – and the Bank of Japan may struggle to halt the Yen's deterioration.