02 December 2024, GBP/USD
Event to pay attention to today:
18:00 GMT+3. USD - ISM Manufacturing PMI
GBPUSD:
Amid ongoing geopolitical risks, fears of a second wave of trade war after US President-elect Donald Trump takes office in January are driving some asset flows towards the US Dollar and putting pressure on GBP/USD. Indeed, Trump has threatened to impose 100 percent tariffs on the so-called BRICS countries - Brazil, Russia, India, China and South Africa - if they replace the US dollar with another currency for international transactions.
Trump has also promised big tariffs against America's three biggest trading partners - Mexico, Canada and China. This could push up consumer prices and set the stage for the Federal Reserve (Fed) to stop cutting interest rates or possibly raise them again. In addition, the cautious market sentiment is proving to be another factor helping the buck recover some of last week's heavy losses to its lowest level since Nov. 12.
Traders may also refrain from aggressive directional bets ahead of the release of important macroeconomic data from the US scheduled for the beginning of the new month, starting with the ISM manufacturing PMI on Monday. However, the market's main focus will be on the all-important monthly US employment data, known as the Non-Farm Payrolls (NFP) report, which will be released on Friday. It may provide clues as to the path of the Fed rate cut and influence the price dynamics of the dollar.
Trading recommendation: Watching the level of 1.2750, trading mainly with Sell orders
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