The pound is trading quietly, as the pair remains slightly above the 1.66 line in Friday’s European session. GBP/USD is trading above the 1.66 line in the North American session. In economic news, British Current Account weakened in February, falling well short of the estimate. British Final GDP posted another strong gain. In the US, today’s highlight is US Revised UoM Consumer Sentiment.
US Unemployment Claims continues to impress. The key indicator dropped to 311 thousand, its lowest level in over three months. The estimate was 326 thousand, marking the fourth straight week that the reading has come in below the forecast. The news was not as good from Pending Home Sales, with a reading of -0.8%. This disappointed the markets, which had expected a small gain of 0.1%. Earlier in the week, New Home Sales also lost ground in February, and concern is bound to increase about the health of the US housing industry. Final GDP posted a gain of 2.6% in Q4, just shy of the estimate of 2.7%. This was lower than the Q3 gain, but is indicative of a growing economy.
In the UK, the current account deficit continues to grow, as the indicator came in at -22.4 billion pounds. This was much higher than the estimate of -13.5 billion. Current Account is closely linked to currency demand, as a rising deficit indicates that foreigners are purchasing less pounds to execute domestic transactions. On Thursday, Retail Sales posted a solid gain of 1.7%, bouncing back after a decline of 1.5% in January. The reading easily beat the estimate of 0.5%. This key indicator is the primary gauge of consumer spending, which is a key component of economic growth.
Ukraine’s economy is in shambles as a result of the four-month political crisis which led to the ouster of the government and the Russian annexation of the Crimean region. Prime Minister Arseniy Yatsenyuk acknowledged that the country is on the edge of bankruptcy, and GDP could drop by as much as 3% this year. However, help is on the way. The IMF is set to sign a two-year loan of up to $18 billion, and the EU has offered a package of EUR 11 billion. Ukraine has already received two bailouts from the IMF since 2008, and will have to implement budget cuts and other measures in order to receive the new package from the IMF.
GBP/USD for Friday, March 28, 2014
GBP/USD March 28 at 11:30 GMT
GBP/USD 1.6620 H: 1.6631 L: 1.6599
- GBP/USD is steady on Friday. The pair touched a low of 1.6599 line early in the European session.
- On the downside, 1.6549 is providing weak support. This is followed by a stronger line at 1.6416.
- 1.6705 continues to provide resistance.
- Current range: 1.6549 to 1.6705.
Further levels in both directions:
- Below: 1.6549, 1.6416, 1.6329, 1.6236 and 1.6146
- Above: 1.6705, 1.6765, 1.6896 and 1.6964
OANDA’s Open Positions Ratio
GBP/USD ratio is unchanged in Friday trading. This is consistent with what we are seeing from the pair, as the pound is showing little movement. A large majority of the open positions in the GBP/USD ratio are short, indicative of a trader bias towards the dollar posting gains.
The pound continues to trade above the 1.66 line. GBP/USD is stable in the North American session.
- 00:05 British GfK Consumer Confidence. Estimate -6 points. Actual -5 points.
- 00:20 US FOMC Member Daniel Tarullo Speaks.
- 9:30 British Current Account. Estimate -13.5B. Actual -22.4B.
- 9:30 British Final GDP. Estimate 0.7%. Actual 0.7%.
- 9:30 British Index of Services. Estimate 0.6%. Actual 0.9%.
- 9:30 British Revised Business Investment. Estimate 2.4%. Actual 2.4%.
- 12:30 US Core PCE Price Index. Estimate 0.1%.
- 12:30 US Personal Spending. Estimate 0.3%.
- 12:30 US Personal Income. Estimate 0.4%.
- 13:55 US Revised UoM Consumer Sentiment. Estimate 80.6 points.
- 13:55 US Revised UoM Inflation Expectations.
*Key releases are highlighted in bold
*All release times are GMT
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