BRITISH POUND, GBP/USD US DOLLAR, BENERGY, COMMODITIES-TALKING POINTS
- After data, the British Pound was weaker but still managed to maintain some levels
- Today's calm in Asia was for energy commodities and most asset classes.
- FOMC next Wednesday, is this quiet before the price-wrecking storm?
After today's domestic and US data, the British Pound fell. The Asian session saw energy commodities and most equity, bond, and currency markets take a break.
After rallying in the US, the US Dollar lost some ground in Asia after losing ground in the Asian session. The US's stellar retail sales numbers of 0.7% m/m in August were beyond expectations.
-0.7% This follows the -1.1% last month, which was revised up to -1.8%.
Due to the severe capacity concerns that remain in key areas of the global supply chain, energy commodities saw a rise in prices this week. The Mexican Gulf storm season, an outage in the English Channel's power supply and shipping bottlenecks are just a few examples.
The Baltic freight index shows that the cost of transporting energy commodities is at its highest level in 13 years. Markets are worried about the impact of high inflation and the upcoming Northern Hemisphere winter. Many parts of Asia have seen power costs rise so much that they are forced to close down factories.
GBP/USD fell slightly after disappointing UK retail sales at -0.9% for August. This print was well below the 0.5% forecast and a previous reading at -2.5%, which was revised to -2.8%.
The University of Michigan's consumer sentiment data today will be closely monitored, but the FOMC meeting next week remains in the forefront of markets' minds.
GREAT BRITISH POUND TECHNICAL ALYSIS
GBP/ USD traded in a range of 1.3572 to 1.3982 for the past 2 months. If tested, these levels could provide support or resistance.
Recent highs at 1.3913 and 1.3725 might offer resistance, while 1.3600 and 1.3600 may provide support. Support may be found at the trend line at 1.3770, which is currently at 1.3763.