The British pound has lost ground in the Monday session, as the pound’s woes continue after sharp losses last week. In North American trade, GBP/USD is trading at 1.3947, down 0.40% on the day. On the release front, there are no British events on the schedule. In the US, Existing Home Sales improved to 5.60 million, beating the estimate of 5.55 million. This marked a 4-month high. On Tuesday, the UK releases Public Sector Net Borrowing and the US publishes CB Consumer Confidence.
The US dollar has posted broad gains to start the week, sending the pound lower for a fifth straight day. GBP/USD slipped 1.6% last week, and the pound is again below the symbolic 1.40 line. The greenback received a boost on Monday from US Treasury bills, which punched past the 3-percent threshold for the first time since January 2014. With treasury spreads widening over European and Japanese yields, investors have propped up the greenback.
Is the US-China trade war headed to a trade truce? The markets have been marked by volatility in recent weeks, in response to tariffs which the US and China have imposed on the other. US President Trump has threatened to slap tariffs on up to $150 billion on Chinese goods, and China has promised to respond with heavy tariffs on US imports. The escalating crisis has raised fears that a trade war between the two economic giants could slow down Chinese growth and trigger a global recession. However, US Treasury Secretary Steven Mnuchin sought to lower the rhetoric on the weekend, saying that he was considering a trip to China, adding he was “cautiously optimistic” that the two sides could resolve the trade dispute. If the US and China can patch up their differences, the safe-haven Japanese currency could continue to lose ground.