GBP/USD stays positive on the Brexit day, eyes on UK PM Johnson’s speech
- GBP/USD keeps the BOE-led gains as the UK approaches the day to leave the EU after 47 years.
- The US preferred respecting its friendship with the UK in the Huawei case.
- UK PM will hail the "dawn of a new era”, the EU-UK trade talks will be the key post-Brexit.
GBP/USD holds onto recovery near 1.3100 while heading into the London open on Friday, the Brexit day. The pair registered sharp gains the previous day as the BOE announced no rate cuts while the US-UK trade tension receded. The traders will now keep eyes on the UK PM Boris Johnson’s speech at 22:00 GMT during the day of joy and sorrow.
The Bank of England’s (BOE) previously bearish bias failed to gain much support among the monetary policy committee (MPC) as the UK central bank had to leave the benchmark interest rate untouched on Thursday. The central bank watered down its growth forecast and marked Brexit uncertainty as a risk but those were mostly ignored.
Elsewhere, the US kept the UK at “the front of the line” despite disagreements over Britain’s decision concerning China’s Huawei’s inclusion in building 5G networks.
Earlier during the day, the Times broke the news that the UK PM wants Canada-style deal with the EU but nothing has confirmed. Markets witnessed risk-reset amid mixed headlines concerning China’s coronavirus. The World Health Organization (WHO) finally rang the alarm but joined Chinese diplomats to sound cautiously optimistic.
While there will be a number of celebrations and sad farewell rallies during the day, the Tory leader’s words on the key time will grab major attention. Even if expectations are low that UK PM Johnson signals anything relating to the future trade relations with the EU, a surprise hint will be taken seriously. On the other hand, the US economic calendar has multiple readings including Chicago PMI and Michigan Consumer Sentiment to make traders busy.
A five-week-old symmetrical triangle between 1.3140 and 1.2980 will keep the traders busy unless any drastic move.