The Pound Sterling edged higher through yesterday’s Asian and early European session just shy of the 1.33 handle against the Greenback however, the move was short-lived and the Pound slid back towards lows of 1.3218. On the release front, House Prices slipped 0.1% in July, according to the Rightmove measure. The annual pace of house price growth slid to 1.4% in July, from 1.7% in June.
Brexit front, the government has narrowly avoided a defeat on its Customs Bill after May “caved in” to pressure from Tory Brexiteers to change the wording of her Chequers plan for leaving the European Union. The Government announced earlier that it accepted all four reforms to the Bill sparking fury among pro-European Conservatives. Mrs May insisted the amendments do not change the blueprint agreed which relates to trade across UK-EU borders after Brexit and are “consistent” with the White paper. May faces further danger today, with pro-EU Tories tabling amendments to the Trade Bill, which returns to the Commons.
Looking ahead, The governor of the Bank of England testifies in Parliament and may face a few tough questions about postponing the rate hike and the impact of Brexit on the economy. There have been increasing chances of a rate hike in August, but markets haven’t fully prices this in so any hints will likely rock the pound. We also have a few jobs report piece out of the UK. Average Hourly Earnings, arguably the most essential data points, carry expectations for another month at 2.5% in May, which is below the inflation rate. Any change in wages will move Pound. The unemployment rate for May is estimated to have remained steady at 4.2% and the Claimant Count Change is expected to increase by 2.3K in June after a drop of 7.7K in May.
On the technical side, we see immediate support at 1.3220 followed by 1.3100. On the upside, first line of resistance at 1.3280 and 1.3360.