Will GBP-USD 1.20 Be Breached Today?
GBP/USD is approaching the key 1.20 figure with the level being tested over the weekend. If this level is broken the next technical support is 1.1841 but where Sterling will fall to if the 1.20 handle is breached is an area of great concern within the markets.
There was further signs of a deepening decline of the British high street with store vacancy rates hitting a four-year high this summer. Store closures combined with the steepest decline in June shopper footfall since 2012 suggests a very tough period for bricks-and-mortar firms. There are key employment data releases on Tuesday and the market is currently expecting improved numbers.
There is a mounting risk of political uncertainty in Italy as Deputy Prime Minister Matteo Salvini of the Lega Nord party intends to challenge the current PM Giuseppe Conte through a vote of no confidence. If Salvini succeeds he will able to put forward his agenda, with less internal party friction, of promised tax cuts. With the lagging European economic outlook, any political shockwaves from Italy could have a severe impact across the Eurozone with fears that Italy could spark another debt crisis.
Alongside the Italian political volatility, Wednesday is a key day for Eurozone data releases that could give indications of the overall picture across the single currency block. On Wednesday there is German GDP followed by Eurozone GDP as a whole.
|7:30 AM||Vehicle Sales YoY JUL||-8%||-9.6%|
|2:00 PM||3-Month BTF Auction||-||-0.561%|
|2:00 PM||12-Month BTF Auction||-||-0.645%|
|2:00 PM||6-Month BTF Auction||-||-0.658%|
|2:00 PM||GDP Growth Rate YoY Prel Q2||0.90%||0.5%|
|4:00 PM||Consumer Inflation Expectations JUL||2.60%||2.67%|
|4:30 PM||3-Month Bill Auction||-||1.990%|
|4:30 PM||6-Month Bill Auction||-||1.950%|
|5:00 PM||WASDE Report||-||-|
|7:00 PM||Monthly Budget Statement JUL||$-78B||$-8B|
|11:00 PM||RBA Kent Speech||-||-|