GBP/USD is stable in Thursday trading, with the pair continuing to trade above the 1.58 line in the North American session. In economic news, US Unemployment Claims dropped sharply, but this was apparently due to technical issues in counting claims. Over in the UK, the Inflation Hearings took place as BOE Governor Mark Charney and other BOE policymakers testified before parliament.
On Thursday, US Unemployment Claims dropped to a sizzling 292 thousand last week, well below the estimate of 332 thousand. However, a Department of Labor spokesman said the decrease was due to computer upgrades in two states, which meant that not all claims were processed. The four-week average, which is a less volatile gauge of unemployment claims, dropped to 321,000, its lowest level since 2007.
When will the Fed press the QE tapering trigger? With mixed employment numbers coming out of the US, it remains unclear what the Fed is planning to do. Unemployment Claims looked very sharp on Thursday, but other employment releases have not been as strong. Tuesday’s JOLTS Job Openings looked weak, coming in at 3.69 million, way off the estimate of 3.96 million. Last week’s Non-Farm Payrolls came in at 169 thousand, missing the estimate of 178 thousand. The Unemployment Rate dropped from 7.4% to 7.3%, but this improvement is not all that significant, given the low participation rate in the labor force. There has been talk of the Fed reducing QE as early as September, but we’re unlikely to see any action if US employment numbers don’t improve.
The Syrian crisis has taken on a new twist, as US military action, which seemed a foregone conclusion in late August, is currently on the backburner. The US and Russia are spearheading intensive efforts to come up with a diplomatic solution to the crisis. Under the proposed plan, Syria would hand over its entire arsenal of chemical weapons to the international community to be destroyed. Speaking on US television earlier in the week, President Obama said that he would delay any military action as long as a diplomatic solution was possible, but that a strike against Syria was still on the table. If the diplomatic efforts gain momentum and the crisis eases, we could see the safe-haven dollar lose ground.
GBP/USD for Thursday, September 12, 2013
GBP/USD September 11 at 16:40 GMT
GBP/USD 1.5818 H: 1.5828 L: 1.5816
- GBP/USD is showing little movement in Thursday trading.
- The pair continues to face resistance at 1.5877. This is followed by resistance at the significant line of 1.6000. This line has remained intact since January.
- On the downside, the GBP/USD is receiving support at 1.5756. This is followed by a stronger support level at 1.5645.
- Current range: 1.5756 to 1.5877
Further levels in both directions:
- Below: 1.5756, 1.5645, 1.5527, 1.5432 and 1.5309
- Above: 1.5877, 1.6000 and 1.6125 and 1.6231
OANDA’s Open Positions Ratio
The GBP/USD ratio is unchanged in Thursday trading. This is reflected in the pair’s current movement, as the pair has taken a breather after posting sharp gains on Wednesday. The ratio is comprised of a majority of short positions, which reflects a strong bias in favor of the US dollar reversing direction and posting gains against the pound.
The pound remains above the 1.58 line in Thursday trading. With could see the pair continue to drift in the North American session.
- 9:00 British Inflation Report Hearings.
- 9:00 British 10-year Bond Auction. Actual 298%.
- 12:30 US Unemployment Claims. Estimate 332K. Actual 292K.
- 12:30 US Import Prices. Estimate 0.6%. Actual 0.0%.
- 13:00 FOMC Member William Dudley Speaks.
- 14:30 US Natural Gas Storage. Estimate 65B. Actual 65B.
- 17:00 US 30-year Bond Auction.
*Key releases are highlighted in bold
*All release times are GMT
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