Cable has suffered from undecided sentiment since its slump on Tuesday.
Notable releases today (Times are GMT+1)
09.30 UK Services PMI (Small improvement forecast 52.4 v 52.3 for April)
13.30 US NFP and Unemployment Data including inflation indicators such as average hourly earnings
14.45 US Services PMI (Small improvement forecast 51.4 v 51.2 for April)
15.00 Various US Manufacturing adata including and ISM Non Manufacturing
Slowly decreasing expectations of a June Fed Hike have kept the dollar fairly stable, with a modest increase in strength following FOMC Member Kaplan’s comments yesterday that he thought June or July would be an appropriate time to raise rates. Kaplan had previously highlighted the risk effect of Brexit and its potential to cause the June Hike to be delayed – so there is a strong chance we are looking at July.
Yellen is speaking on Monday and will no doubt try hard to keep June a live meeting whatever the outcome of NFP so it is unlikely that USD will significantly weaken in the run up to June 15th and subsequently July.
UK Services PMI will probably not move cable as speculators hold their breath anticipating further Brexit polling data. Polls have demonstrated an ability to move GBPUSD: sterling rallies on data indicating a Remain vote and slumps on a “Brexit” vote. This is a key driver for GBPUSD until the vote on 23 June.
However we should keep track of the UK’s underlying economic conditions which seem to be neutral to positive for the moment. This will determine how strongly the GBP rallies after a Remain outcome, or devalues after a Brexit outcome, and will still have a minor effect ont he currency’s valuation in the run up.
It is hard to see the Fed signalling that a June Fed Hike is off the table. On that basis there is a modest bearish bias on Cable subject to UK Brexit Polling Data which trumps that in the short term.
rangebound between 1.44 and 1.447