GBP/USD is almost unchanged in the Thursday session, following considerable losses on Wednesday. In North American trade, GBP/USD is trading at 1.2280. On the release front, British Construction PMI was modestly higher, improving to 52.5, above the forecast of 52.2 points. US unemployment claims sparkled, falling to 223 thousand, the fewest claims since March 1973. On Friday, the US releases ISM Non-Manufacturing PMI, and the markets will be listening closely as Janet Yellen and three other FOMC members deliver speeches.
There was plenty of anticipation in the air ahead of President Trump’s speech to Congress. In the end, however, the speech was short on specifics and the market reaction was muted. Trump promised “massive” tax relief for the middle class as well as corporate tax cuts. However, he failed to provide details or even timelines on tax reform or infrastructure spending, two themes which he has discussed since the election campaign. Trump stated that he will ask Congress to approve legislation for $1 trillion in infrastructure spending, “financed through both public and private capital”. Analysts noted that although Trump touched on the protectionist theme, such as the trade imbalance with China, his tone was less belligerent than we’ve seen in the past.
The pound continues to struggle, as the currency has lost 1.0 percent this week. Earlier on Thursday, GBP/USD dropped to a low of 1.2258, its lowest level since January 20. The US dollar is broadly stronger this week, thanks to hawkish statements from Federal Reserve policymakers. On Tuesday, FOMC members William Dudley and John Williams both hinted at an imminent hike by the Fed, which has raised the odds of a March hike at 66%, according to Reuters. Dudley said the case for a hike is compelling, while Williams noted that a rate increase will be up for “serious consideration” at the March policy meeting. The markets will be listening closely to speeches from other FOMC members this week, culminating in speeches from Janet Yellen and Fed Governor Stanley Fischer on Friday.
Thursday (March 2)
- 4:30 British Construction PMI. Estimate 52.2. Actual 52.5
- 8:30 US Unemployment Claims. Estimate 243K. Actual 223K
- 10:30 US Natural Gas Storage. Estimate -5B
Upcoming Key Events
Friday (March 3)
- 4:30 British Services PMI. Estimate 54.2
- 10:00 US ISM Non-Manufacturing PMI. Estimate 56.5
- 13:00 Federal Reserve Chair Janet Yellen Speech
*All release times are GMT
*Key events are in bold
GBP/USD for Thursday, March 2, 2017
GBP/USD March 2 at 11:35 EST
Open: 1.2370 High: 1.2307 Low: 1.2258 Close: 1.2275
- GBP/USD has showed limited movement in the Thursday session
- 1.2272 was tested earlier in support and is under pressure. It could break during the North American session
- 1.2351 is the next resistance line
Further levels in both directions:
- Below: 1.2272, 1.2143 and 1.2033
- Above: 1.2351, 1.2471, 1.2579 and 1.2674
- Current range: 1.2272 to 1.2351
OANDA’s Open Positions Ratio
GBP/USD ratio is unchanged in the Thursday session. Currently, long positions have a majority (65%), indicative of trader bias towards GBP/USD breaking out and moving upwards.
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.