As reported by the US Census Bureau, there were 1.164 million constructions of residential buildings The UK Public Sector Net Borrowing figure improved with the latest release, which showed that the borrowing was at £9.7 billion in May, beating the £9.35bn forecast. Moreover, the April's data was also revised up to £8.2 billion from the initial £6.58 billion, meaning that it was significantly worse than first thought. An increase in the deficit has been detected mostly due to higher government spending, which rose to £56 billion, while central government investment rose up to 2.8%, followed by an increase in debt interest to 16.7%. There was also a downward revision to net borrowing in the preceding year, namely down to £74.9 billion, down £16.7 billion in comparison to the year before that, as reported by the Office for National Statistics.
Nevertheless, according to the Office for Budget Responsibility's March budget review, this figure is still above their target of £72.2 billion. The OBR also kept revising its medium-term forecasts, amid the government receipts failing to meet expectations, with them anticipating the government to miss its surplus target only starting from 2019. Overall, debt keeps rising, excluding taxpayer-backed banks, which was equal to 83.7% of GDP at the end of May, or £1.6 trillion.
All focus shifts to US data
GBP/USD attempts to surge again
As was anticipated, the Sterling managed to rebound on Tuesday, unable to fall below the post-Brexit's low of 1.3230. Technically, the Pound is likely to continue edging higher today, as the 1.3230 mark is also reinforced by the lower Bollinger band. The Cable could keep appreciating until the 1.40 major level is reached, as there are no substantial resistances on the way to that area. Meanwhile, technical indicators retain mixed signals, unable to confirm the scenario. As a result, risks of the GBP/USD slumping back to 1.3320 or even lower persist.
Daily chart
Hourly chart
Bulls remain in control
Bulls slightly retreated, as 57% of all open positions are now long (previously 60%). At the same time, the number of purchase orders increased from 54 to 57% over the day.
Compared to Monday, there are also slightly more bears at OANDA - they take up 57% of the positions open with the Canada-based broker. Sentiment at Saxo Bank is still bearish, as here the number of bears exceeds the number of bulls by eight percentage points.
Spreads (avg, pip) / Trading volume / Volatility
Majority sees GBP/USD below 1.44 in three months
Exactly half of traders (50%) believe the British currency is to cost 1.44 or less dollars after a three-month period. The most popular price intervals was selected by slightly less than a fifth (14%) of the voters, namely the 1.36-1.38 one, while the second most popular choice implies that the Sterling is to cost either between 1.44 and 1.46 or between 1.46-1.48 dollars in three months, both chosen by 11% of the surveyed. At the same time, the mean forecast for Sep 29 is 1.4354.