Opened last week near 1.6000, GBP / USD rose to 1.6040 on Monday as manufacturing activity in the world's biggest economy lost some momentum, with the PMI Manufacturing index fell to its lowest level 3 - 52.8 months. Print underwhelming affected by soft demand both domestically and from abroad.
Agitated traders took Pound to 1.5956 weekly lows against the 'Greenback' out Tuesday on Bank of England Deputy Governor Paul Tucker sounded somewhat dovish tone regarding the monetary policy, despite the fact that UK CPI inflation remained above the Bank's target of 2.0 % in each each 45 months.
Sterling surged higher by more than a percent on Wednesday as the latest CBI retail sales survey showed that consumer spending, which accounts for about 60 % of the UK economy, hitting the highest level for 15 months during September. The U.S. dollar hampered by a downward revision in July Durable Goods Orders print of -7.3 % to -8.1 % , which canceled the effects of better -than-expected scores slightly +0.1 % for August.
GBP/USD retreated to 1.6040 on Thursday, the UK 's annual GDP in the second quarter was revised down from 1.5 % to 1.3 % and the UK current account deficit has widened unexpectedly reported to - £ 13 billion. The 'Greenback' benefited from low morale 305,000 Initial Jobless Claims numbers, which bodes well for the U.S. job market.
The pound rose nearly a penny on Friday as BoE Governor Mark Carney commented that he does not expect to introduce more stimulus measures further at this point in time and the GBP / USD continue climbing when the market reopened for this week, touching a 9 month high of 1.6182 in response to fears of a government shutdown in the United States.
If the U.S. politicians can not agree on a budget then more than 700,000 federal employees will be sent home from work without pay on Tuesday . Analysts estimate that 2 week shutdown that would reduce U.S. GDP by about -0.3 % and 4 weeks of the closing will shave off about -1.3 %.
While the prospect of a government shutdown during the first 17 years seriously hamper demand for the 'Greenback', also threatens to shake - up the U.S. economic calendar : the biggest event risk this week is Non - farm payrolls on Friday, but the numbers will not be released during the federal termination. Sterling has the potential to break through the 1.6200 level later this week if Democrats and Republicans can not reach an agreement . However , even if a last minute deal is reached, GBP / USD could rally if the non-farm Payroll report, an estimated 180,000 prints, interpreted as too soft - for - pointed by the market. (TorFx)
