GBP/USD struggles around 1.3060 as investors await May-Juncker meet
- The GBP/USD pair trades around 1.3060 ahead of the London open on Wednesday.
- Investors remain cautious as the UK PM Theresa May heads Brussels to meet EU Commission chief Jean-Claude Juncker for Brexit talks.
- The pair has 1.3080 and 1.3050 as immediate barriers with 1.3110 and 1.2990 likely following numbers to expected during either side break.
The British Pound (GBP) trades near 1.3060 versus the US Dollar (USD) heading towards European open on Wednesday. The pair struggles to extend previous moves as investors await details of the meeting between the UK Prime Minister Theresa May and the EU Commission chief Jean-Claude Juncker.
The meeting will be PM May’s one of many attempts to regain British politician’s support via a Brexit deal after her initial proposal was badly rejected in the parliament during last month.
Off-late the Irish border issue has been in limelight amid the EU’s unwillingness to re-negotiate the backstop option suggested by May whereas diplomats at home are searching for alternatives to the same.
During her visit to Brussels, PM May is expected to push Juncker towards re-negotiation and/or possible solution to the Irish border in order to win confidence at home.
The Guardian reported May expecting a breakthrough from a meeting whereas another UK daily, Evening Standard, reported that Juncker isn’t expecting any breakthrough from the fresh talks.
While confusing signs from both the leaders are increasing uncertainty for the GBP traders, any developments from the meeting would be taken seriously to determine near-term Pound moves.
On ther other hand, minutes of the US Federal Reserve’s January 30 meeting will also play its role to direct near-term GBP/USD moves. The Federal Open Market Committee (FOMC) left monetary policy unchanged at the latest meeting but conveyed bearish bias towards furture policy moves. Traders will observe the minutes for details on how strongly Fed policymakers favor/unfavor Fed rate changes.
GBP/USD Technical Analysis
A sustained break of 1.3080 can enable the GBP/USD pair to aim for 1.3110 and then rise to 1.3135 but 1.3215 could challenge further upside.
On the downside break of 1.3050 immediate support, 1.2990 and 1.2940 may gain sellers’ attention.
Dollar struggles ahead of Fed minutes, but gains on the yen
The dollar was capped against its peers on Wednesday on falling U.S. yields and before the Federal Reserve’s policy meeting minutes, though it managed to gain on the yen as stronger investor risk appetite curbed demand for the Japanese currency.
The U.S. currency was up 0.2 percent at 110.83 yen.
The Japanese currency, which tends to serve as a safe-haven in times of risk aversion, gave up ground as Tokyo shares climbed to fresh two-month highs.
“The yen is on the defensive with strong equities prompting a ‘risk on’ mood,” said Koji Fukaya, president of FPG Securities.
The dollar had already received a lift against the yen on Tuesday after Bank of Japan Governor Haruhiko Kuroda said the central bank was ready to ramp up stimulus if sharp yen rises hurt the economy.
“The BOJ does not really have a lot of options left even if it wanted to act. But the global trend -starting with the United States, Europe and Australia- is moving toward central bank dovishness and the BOJ’s stance is in line with the trend.”
The dollar index versus a basket of six major currencies was a touch lower at 96.451 after shedding about 0.4 percent overnight.
“The dollar is weighed with Treasury yields on a downturn. Attempts by participants to price in potentially dovish FOMC (Federal Open Market Committee) meeting minutes are also keeping the dollar on the defensive,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities.
The benchmark 10-year U.S. Treasury yield fell sharply to an 11-day low on Tuesday ahead of the Fed meeting minutes, which are due later on Wednesday.
The minutes from the January Fed meeting will be closely watched following a dovish statement at that review.
The dollar has struggled against most of its rivals as, along with the yen, it has also served as a safe-haven.
The dollar index rose to a two-month high last week but demand for the liquid greenback has recently ebbed on optimism that a fresh round of talks between China and the United States would help resolve their trade conflict.
The euro nudged up 0.1 percent to $1.1353 and stood near two-week peak of $1.1358 brushed on Tuesday.
The onshore Chinese yuan gained about 0.5 percent to 6.7248 per dollar, its strongest since Feb. 1.
The yuan advanced after Bloomberg reported that the United States is pressing to secure a pledge from China that it will not devalue its yuan as a part of a trade deal.
Stock Market News
Dow Ekes out Gain as Trump Touts Progress on Trade, Walmart Gains
The Dow closed modestly higher Tuesday after paring losses following gains in Walmart and growing hopes the U.S. and China will reach a trade deal.
The Dow Jones Industrial Average rose 0.03%, the S&P 500 added 0.15%, while the Nasdaq Composite gained 0.19%.
With less than two weeks until the current 90-day trade war truce expires, President Donald Trump hinted the March 1 deadline could be extended, saying it is not a “magical date.”
The United States and China kicked off another round of talks as they look to reach a deal before the deadline.
Trade-sensitive names like Boeing (NYSE:BA) and Caterpillar (NYSE:CAT) ended the session in the red.
In the run-up to the talks, Trump said in tweet: “Big progress being made on soooo (sic) many different fronts!”
Dow component Walmart (NYSE:WMT) rose 2% after it reported fourth-quarter results that topped estimates from Investing.com on the bottom line, supported by a 43% surge in e-commerce.
The upbeat report from Walmart comes a week after the U.S. Census Bureau said retail sales in December fell by the most since 2009, which fueled fears that the strength of the U.S. consumer was on the wane.
In tech, Facebook (NASDAQ:FB) came under fire as U.K. lawmakers dubbed the social media company a “digital gangster,” claiming it had knowingly violating data and privacy laws in the country.
Other FANG stocks, including Apple (NASDAQ:AAPL), Netflix (NASDAQ:NFLX) and Google parent Alphabet (NASDAQ:GOOGL) ended the day higher.
Energy also propped up the broader market as oil prices settled higher despite a report from the Energy Information Administration forecasting a jump in shale output.
U.S. oil output from seven major shale plays is forecast to climb by 84,000 barrels a day in March to 8.398 million barrels a day, according to a report from the EIA.
Concerns about global growth, however, kept a lid on gains in the broader market.
The World Trade Organization warned its outlook on trade growth could be revised downward if trade conditions continue to deteriorate. Trade growth is currently forecast to slow to 3.7% in 2019 from an expected 3.9% in 2018.
In other news, Ford Motor (NYSE:F) shares rose 3.4% after the automaker said it would exit its heavy commercial truck business in South America and halt production at a Brazilian plant this year in an attempt to improve profitability in the region.
Weight Watchers International (NASDAQ:WTW) plunged 4.5% after JPMorgan downgraded the company to an underweight rating and cut its price target on the stock to $25 from $37, citing signs of declining user growth on the WW app.
Google says the built-in microphone it never told Nest users about was ‘never supposed to be a secret’
- In early February, Google announced that Assistant would now work with its home security and alarm system Nest Secure.
- The problem — users didn’t know a microphone even existed on their Nest security devices to begin with.
- On Tuesday, a Google spokesperson told Business Insider it had made an “error.”
- “The on-device microphone was never intended to be a secret and should have been listed in the tech specs. That was an error on our part,” the spokesperson said.
In early February, Google announced that its home security and alarm system Nest Secure would be getting an update — users could now enable its virtual assistant technology, Google Assistant.
The problem: Nest users didn’t know a microphone even existed on their security device to begin with.
The existence of a microphone on the Nest Guard (which is the alarm, keypad, and motion sensor component in the Nest Secure offering) was never disclosed in any of the product material for the device.
On Tuesday, a Google spokesperson told Business Insider the company had made an “error.”
“The on-device microphone was never intended to be a secret and should have been listed in the tech specs. That was an error on our part,” the spokesperson said.
Google says that “the microphone has never been on and is only activated when users specifically enable the option.”
It also said the microphone was originally included in the Nest Guard for the possibility of adding new security features down the line, like the ability to detect broken glass.
Still, even if Google included the microphone in its Nest Guard device for future updates — like its Assistant integration — the news comes as consumers have grown increasingly wary of major tech companies and their commitment to consumer privacy.
For Google, the revelation is particularly problematic and brings to mind previous privacy controversies, such as the 2010 incident in which the company admitted that its fleet of Street View cars “accidentally” collected personal data transmitted over consumers’ unsecured WiFi networks, including emails.
Google bought Nest — which was initially known for its smart thermostat device — back in 2014 for $3.2 billion. It became a standalone company in 2015 when Google reorganized as Alphabet, but in February 2018, it was brought back into Google under the leadership of head hardware exec Rick Osterloh.
Crypto Mixed; Elon Musk Endorses Bitcoin
Prices of major digital coins were mixed in Asia on Wednesday without a directional mover, but Tesla (NASDAQ:TSLA) CEO Elon Musk saying Bitcoin is “brilliant” and “paper money is going away” created some buzz in the crypto space.
On Tuesday in an interview on advisory services firm ARK Invest’s podcast, Musk said “Bitcoin’s structure is quite brilliant” and digital currency is “a far better way to transfer value than pieces of paper.”
But he also noted that “one of the downsides of crypto is that computationally it is quite energy intensive.”
Musk tweeted about Bitcoin last year, prompting many to wonder if his electric car company would have crypto-related plans. But Musk clarified that it would not be a good use of the resources of his company to get into this area.
The crypto space remained fairly quiet on Wednesday morning. Bitcoin was only up 0.79% to $3,916.9 by 11:02 PM ET (04:02 GMT).
Ethereum slid 2.47% to $142.85, while XRP slightly added 0.82% to $0.32542 and Litecoin gained 0.38% to $47.525.
The market capitalization of all cryptocurrencies rose further to $133.4 billion from $120 billion last Friday.
Meanwhile, JPMorgan’s launch of its own digital token JPM coin could change the banks’ approach to blockchain and crypto, according to CNN. Param Vir Singh, a professor of business technologies at Carnegie Mellon University, told CNN that “more banks will take [crypto] seriously” as JPMorgan’s move could force other banks to follow suit.
Last week, the news of JPM coin shook the crypto industry as the investment bank’s CEO Jamie Dimon once called Bitcoin a “fraud”. The move signified a shift in the U.K. bank’s approach to crypto.
Elsewhere, the saga surrounding Canadian crypto exchange QuadrigaCX continued to develop. On Tuesday, a Canadian judge appointed legal representatives for the customers of the crypto exchange. The next hearing will be on March 5.
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