GBPUSD stuggles to gather recovery momentum, trades below 1.2100
- GBP/USD stays under constant bearish pressure on Monday.
- The greenback preserves its strength despite disappointing data.
- Focus shifts to US housing data, UK July jobs report.
GBP/USD started the week under bearish pressure and dropped to a weekly low of 1.2051 in the European session. Although the pair staged a rebound toward 1.2100, it failed to reclaim that level. As of writing, the pair was down 0.3% on the day at 1.2090.
Dollar capitalizes on safe-haven flows
The negative shift witnessed in risk sentiment on Monday provides a boost to the safe-haven greenback. Disappointing macroeconomic data releases from China alongside the escalating geopolitical tensions don’t allow risk-sensitive assets to find demand.
Meanwhile, the data from the US showed on Monday that the NY Fed Empire State Manufacturing Index slumped to -31.3 in August from 11.1 in July. The dollar lost some strength as this print missed analysts’ forecast of 8.5 by a wide margin but the US Dollar Index managed to hold above 106.00.
Later in the session, the NAHB Housing Market Index data from the US will be looked upon for fresh impetus. Meanwhile, Wall Street’s main indexes remain on track to open deep in negative territory with US stock index futures losing between 0.45% and 0.7% on the day.
On Tuesday, the UK’s Office for National Statistics will release the July jobs report. Investors expect the ILO Unemployment Rate to remain steady at 3.8% in the three-month period ending in July.
Reuters reported that 30 of 51 economists that took part in a recently conducted survey saw the Bank of England raising its policy rate by 50 basis points in September but this report failed to help the sterling find demand.