Pound Strengthens Amid Risk Appetite On Hopes Of US-Mexico Deal
June 07 2019 - 1:24AM
RTTF2
The pound climbed against its major counterparts in the early
European session on Friday, as European shares rose amid growing
hopes the U.S. and Mexico will agree a deal to avert new
tariffs.
The Bloomberg reported that U.S. officials are considering
delaying tariffs on Mexican imports to allow for further talks.
Investors await a crucial U.S. jobs report that could reinforce
expectations of an interest rate cut in coming months.
The report is expected to show employment increased by 185,000
jobs in May after surging up by 263,000 jobs in April. The
unemployment rate is expected to hold at 3.6 percent.
U.K. Prime Minister Theresa May will officially resign as the
leader of the Conservative Party today, but will stay on as prime
minister until a political successor is selected.
Data from the Lloyds Bank subsidiary Halifax and IHS Markit
showed that UK house prices increased at a slower pace in May.
House prices grew only 0.5 percent month-on-month in May after
gaining 1.2 percent in April. Nonetheless, this was the second
consecutive rise in prices and above the forecast of flat
growth.
On a yearly basis, house prices increased 5.2 percent in three
months to May compared to the 5 percent growth in three months to
April. Economists had forecast the rate to remain steady at 5
percent.
U.K.'s hiring trends remained subdued amid Brexit-related
uncertainty, the Report on Jobs by KPMG and Recruitment &
Employment Confederation showed.
Permanent placement decreased further in April, while temporary
billings grew at the slowest pace for over six years.
The currency traded mixed against its major counterparts in the
Asian session. While it rose against the yen and the franc, it held
steady against the euro and the greenback.
The pound advanced to 0.8856 against the euro, compared to
0.8880 hit late New York Thursday. If the pound rallies further,
0.86 is likely seen as its next resistance level.
The pound that closed yesterday's trading at 1.2688 against the
greenback appreciated to 1.2722. The pound is seen finding
resistance around the 1.28 region.
The U.K. currency climbed to 1.2639 against the franc, after
dropping to 1.2575 at 5:00 pm ET. The next possible resistance for
the pound is seen around the 1.28 level.
The pound firmed to 138.01 against the yen, setting a weekly
high. The pound is likely to test resistance around the 139.00
level.
Looking ahead, U.S. and Canadian jobs data for May, U.S.
wholesale inventories and consumer credit for April are due in the
New York session.
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