The pound has posted slight losses on Wednesday, as GBP/USD is trading at the 1.48 line at the start of the North American session. In economic news, Nationwide HPI was unexpectedly strong, posting a gain of 0.8%. Over in the US, today’s major event is Pending Home Sales, with the markets expecting a solid gain of 0.6%.
The British pound continues to slide, and the currency has lost about 250 points against the US dollar in December. The pair dipped below the 1.48 line earlier on Wednesday, the first time that has occurred since April. Investor confidence in the pound has sagged as the UK economy has struggled. CPI, the prime gauge of consumer inflation, has recorded a gain above 0.1 percent only once in all of 2015. Employment numbers were weak in November. The dollar received a boost from the historic Federal Reserve rate hike earlier in December, the first upward move in over nine years. Traders should also keep in mind that the recent rate hike is expected to be the first in a series of incremental rate hikes over the course of 2016, and higher interest rates means that the US dollar will become even more attractive to investors, at the expense of other currencies, such as the British pound.
CB Consumer Confidence looked excellent in December, as the key indicator jumped to 96.5 points, up sharply from 90.4 points a month earlier. This easily beat the estimate of 93.9 points. This follows a solid UoM Consumer Sentiment, which improved to 92.6 points, above the forecast of 92.1 points and marking a 4-month high. Consumer confidence indicators are closely monitored by analysts, as stronger consumer confidence often translates into increased consumer spending, a key driver of economic growth. Strong consumer demand has been an important component in the US recovery, as the economy enters the New Year in solid shape, which bodes well for the US dollar.
Wednesday (Dec. 30)
- 7:00 British Nationwide HPI. Estimate 0.4%. Actual 0.4%
- 15:00 US Pending Home Sales. Estimate 0.6%
- 15:30 US Crude Oil Inventories. Estimate -1.8M
*Key releases are highlighted in bold
*All release times are GMT
GBP/USD for Wednesday, December 30, 2015
GBP/USD December 30 at 13:30 GMT
GBP/USD 1.4799 H: 1.4844 L: 1.4792
- 1.4813 has switched to a resistance role as the pound trades at lower levels. It is a weak line.
- 1.4952 is an immediate support level
- Current range: 1.4695 to 1.4813
Further levels in both directions:
- Below: 1.4695, 1.4601 and 1.4465
- Above: 1.4813, 1.4952, 1.5026 and 1.5153
OANDA’s Open Positions Ratio
GBP/USD ratio is showing long positions with a strong majority (60%). This is indicative of trader bias towards the pound reversing its current slide downwards.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.