GBP/USD ignores Brexit plays at the House of Lords ahead of UK employment data
- GBP/USD holds onto recovery gains made the previous day.
- Buyers shrug off the Conservatives’ first defeat at the UK’s House of Lords.
- UK’s December month jobs report will be the key to forecast BOE’s decision following the recently downbeat British data and BOE Governor’s dovish tone.
GBP/USD pair extends the previous day’s recovery while taking the bids to 1.3015 ahead of the London open on Tuesday. The pair seems to have taken alternative clues from the ruling Tory party’s defeat in the parliamentary voting over the Brexit bill. However, major attention will be given to the UK’s employment data to better foresee the BOE’s next moves.
The House of Lords turned down three amendments from the UK PM Boris Johnson’s Brexit Withdrawal Agreement Bill (WAB). This was the first parliamentary defeat by the ruling Conservative after the election. One of the three amendments was relating to providing a physical document to the EU national as proof stating their right to live in the UK after it leaves the bloc. The other concerned with the powers of ministers to set aside judgments by the EU Court of Justice as well as proposals to protect the independence of the courts with regard to EU case law after Brexit. Even so, the bill will return to the House of Commons for final reading whereas the Tories have a majority and can rule out the latest push that was earlier disliked by the UK PM Johnson.
The reason for the GBP/USD price’s extended recovery despite Brexit plays in the House of Parliament could be traders’ optimism that these laws will help during the UK-EU trade negotiations.
Elsewhere, the US traders will return to their desks after the extended weekend and will witness President Donald Trump’s impeachment trial. During the Asian session, news surrounding China virus and Beijing’s welcome to the competitive US products gained the spotlight.
Today’s British employment data gains more importance considering the recently downbeat economics from the UK as well as the BOE Governor’s dovish tone in the latest public appearance. Ahead of the event, analysts at the TD Securities said, “We're in line with consensus in looking for the unemployment rate to hold steady at 3.8% in November, as it continues to bounce around near-multi decade lows. We also look for wage growth to ease a tenth lower, with headline wages at 3.1% y/y, and ex-bonus wages at 3.4%. While wage growth had been extremely strong through the middle of the year, it appears to be slowing slightly into the end of 2019.”
Buyers need to cross a month-old falling trend line, near 1.3035 now, to justify the recent recovery otherwise chances of the pair’s decline to sub-1.3000 area can’t be denied.