- GBP/USD remains under constant downward pressure on Monday.
- The dollar retains its strength despite the disappointing data.
- The focus is on US housing data and the UK jobs report for July.
GBP/USD started the week under bearish pressure and fell to a weekly low of 1.2051 in the European session. Although the pair staged a rebound towards 1.2100, it failed to recapture that level. At the time of writing, the pair had lost 0.3% on the day, trading at 1.2090.
Dollar Takes Advantage of Safe Haven Flows
The negative change in risk sentiment seen on Monday boosted the greenback as a safe haven. Disappointing macroeconomic data releases from China, coupled with escalating geopolitical tensions, are preventing risk-sensitive assets from finding demand.
Meanwhile, US data showed on Monday that the Empire State Manufacturing Index fed New York plummeted to -31.3 in August from 11.1 in July. The dollar lost some steam as this figure missed the analyst forecast of 8.5 by a wide margin, but the DXY Dollar Index managed to hold above 106.00.
Later in the session, data from the NAHB index of the US housing market will be seen for a further boost. Meanwhile, Wall Street’s major indices remain on track to open in negative territory, with US stock index futures down 0.45%-0.7% on the day.
On Tuesday, the UK Office for National Statistics will report July employment. Investors expect the ILO unemployment rate to remain at 3.8% in the three-month period ending July.
Reuters reported that 30 of 51 economists in a recent survey saw the Bank of England raising its policy rate by 50 basis points in September, but this report did not help sterling find demand.
GBP/USD Technical Levels
Source: Fx Street
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