The British pound is showing little movement on Tuesday, as the pair trades in the high-1.61 range. In economic news, BOE Governor Mark Carney testified before a parliamentary committee and said that the Bank was in no hurry to raise interest rates. Over in the US, the news was mixed, as Building Permits looked sharp, breaking above the 1 million mark. However, Consumer Confidence was a disappointment, slipping to a seven-month low.
The week did not start well in the US, as Pending Home Sales posted its fifth straight decline in October. However, the tune was markedly different on Tuesday, as Building Permits pushed over the 1 million mark, hitting 1.03 million units. This was the highest level since June 2008 and beat the estimate of 0.94 million. The September release, which had been postponed due to the government shutdown last month, came in at 0.97 million, above the estimate of 0.94 million. These strong releases were tempered by a weak CB Consumer Confidence release, as the key indicator dropped to 70.2 points, its lowest level since March. The markets had expected better, with the estimate standing at 72.2 points.
BOE Governor Mark Carney testified before the Treasury Committee in parliament on Tuesday. Carney said that despite the improving economic picture, there was plenty of slack in the British employment market, and that the BOE might hold off on a rate hike even if unemployment fell below the 7% level. Carney emphasized that the 7% mark was a threshold rather than a trigger for a rate increase. As the UK economy is growing at the fastest clip amongst developed countries, there has been speculation about the possibility of a rate hike to cool down the economy. Carney continues to try and dampen such expectations, and appears to have ruled out any hikes in the near future.
In the UK, we continue to see important economic indicators climb to multi-year highs. Last week, CBI Industrial Order Expectations jumped to 11 points in October, bouncing back from a weak reading of -4 points the month before. This was the manufacturing indicator’s best showing since 1995, and is another indication that the British economy continues to pick up steam. Meanwhile, Public Sector Net Borrowing posted a deficit of 6.4 billion pounds in October, an excellent improvement from 9.4 billion a month earlier. However, this was well off the estimate of 4.8 billion.
GBP/USD for Tuesday, November 26, 2013
GBP/USD November 26 at 16:00 GMT
GBP/USD 1.6181 H: 1.6194 L: 1.6139
- GBP/USD is trading quietly in Tuesday trading. The pair lost ground in the European session but has recovered most of these losses in North American trading.
- 1.6125 continues to provide support. This is followed by support at the key level of 1.6000.
- On the upside, 1.6231 continues to provide resistance. The next resistance line is the round number of 1.6300, which has held steady since December 2012.
- Current range: 1.6125 to 1.6231.
Further levels in both directions:
- Below: 1.6125, 1.6000, 1.5877, 1.5756 and 1.5645
- Above: 1.6231, 1.6300, 1.6476 and 1.6600
OANDA’s Open Positions Ratio
GBP/USD ratio has reversed directions on Tuesday, pointing to gains in long positions. This is reflected in the pair’s current movement, as the pound has posted modest gains against the US dollar. Short positions continue to dominate the ratio, reflecting a trader bias towards the US dollar posting gains against the pound.
The pair is trading quietly on Tuesday, close to the 1.62 line. GBP/USD showed little reaction to the day’s major releases, so it could be a quiet North American session for the pair.
- 10:00 British Inflation Report Hearings.
- 13:30 US Building Permits. Estimate 0.94M. Actual 1.03M.
- 13:30 September Data – US Building Permits. Estimate 0.94M. Actual 0.97M.
- 14:00 US S&P/CS Composite-20 HPI. Estimate 13.0%. Actual 13.3%.
- 14:00 US HPI. Estimate 0.5%. Actual 0.3%.
- 15:00 US CB Consumer Confidence. Estimate 72.2 points. Actual 70.4 points.
- 15:00 US Richmond Manufacturing Index. Estimate 3 points. Actual 13 points.
*Key releases are highlighted in bold
*All release times are GMT
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