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Sterling Edges Higher, UK GDP Data Eyed

2018-7-10 16:56:58Basics of Trading
Sterling Edges Higher, UK GDP Data Eyed

The pound edged higher on Tuesday despite fresh uncertainty over Brexit following the resignations of David Davis and Boris Johnson, as investors awaited growth data that could keep the Bank of England on track for an August rate hike.

GBP/USD was trading at 1.3274 by 03:53 AM ET (07:53 AM GMT), having touched an overnight low of 1.3224.

Sterling remained on the back foot after Boris Johnson resigned as British foreign secretary on Monday, becoming the third minister to quit the government in twenty-four hours, rather than back Prime Minister Theresa May’s plans for a soft Brexit.

Johnson’s resignation increased the chance that May could face a vote of no confidence, which could throw the future of her government into doubt.

But the pound found support amid reports that May could avoid a leadership challenge, keeping alive hopes that a softer Brexit may be on the cards moving forward.

Sterling was also higher against the euro, with EUR/GBP losing 0.21% to trade at 0.8843.

Investors were looking ahead to monthly GDP data, which was expected to show that the economy is continuing to recover from a sharp slowdown at the start of the year.

Solid growth data would boost the case for a rate hike by the BoE at its next meeting in August.

The UK was also due to release trade data along with figures on industrial and manufacturing production.

The dollar was little changed, with the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, last at 93.87.

The euro was steady, with EUR/USD trading at 1.1745 after rising to a three week high of 1.1790 on Monday.

The dollar pushed higher against the yen, with USD/JPY advancing 0.23% to 111.09.

Concerns over the escalation of the U.S.-China trade dispute eased somewhat, despite new trade tariffs that came into effect on Friday.