GBP/USD lifeless around 1.30, what will be the next catalyst?
- Choppy trading action amid Good Friday doesn't allow for sharp movements.
- US Dollar Index clings to its weekly gains.
- Coming up: Housing starts and building permits data from the U.S.
Similar to every other major pair, the GBP/USD is moving sideways in a tight range on Friday as market participants enjoy the long Easter weekend. As of writing, the pair was down 2 pips on the day at 1.2998.
Later in the session, housing starts, which is expected to increase by 6.5% in March following February's sharp 8.7% drop, and building permits from the United States will be released but are unlikely to receive a meaningful reaction from the markets. At the moment, the US Dollar Index is down 0.1% on the day at 97.35 while adding a little over 0.5% this week. Yesterday's sour market mood following the weak PMI data from the euro area boosted the DXY, which was stuck around the 97 mark during the first half of the week.
Nevertheless, the pair is likely to make limited fluctuations until we get the next major Brexit development. Earlier this week, several news outlets claimed that talks between the government and the opposition Labour party had hit another stalemate. Although a spokesman for the Labour party acted quickly to deny these reports, markets don't seem to be convinced that sides are closer to a deal than they were when they kicked off negotiations ahead of the April 10 EU summit.
According to The Guardian, Labour MPs have urged their leader Jeremy Corbyn not to "torpedo" the prospect of a Brexit agreement with British Prime Minister Theresa May by insisting on a second referendum but we are yet to see a convincing development that can actually impact the British pound's market valuation.