The British pound is steady on Tuesday, as GBP/USD trades in the high-1.65 range in the North American session. The pair remains close to levels last seen in March. In the US, Tuesday’s numbers were a mix. Core Durable Goods declined by 0.8%, but Durable Goods Orders set a monthly record with a huge jump of 22.6%. CB Consumer Confidence was excellent, climbing to 92.4 points. The sole event out of the UK, BBA Mortgage Approvals softened in July and missed the estimate.
US durables painted a mixed picture on Tuesday. Core Durable Goods Orders, a key indicator, came in at -0.8%, its worst showing in 2014. This was nowhere near the estimate of +0.5%. At the same time, Durable Goods Orders stunned the markets with a record gain of 22.6%. The reason? A huge increase in the purchase of passenger planes in July. Core Durable Goods Orders is considered a more reliable indicator because it excludes volatile data such as these plane purchases.
The week started off on a disappointing note, as US New Home Sales dropped to 412 thousand, down from 422 thousand a month earlier (the latter figure was revised from 406 thousand). This was well off the estimate of 426 thousand. There was stronger housing data last week, as Housing Starts hit an 8-month high. We’ll get another look at key housing numbers on Thursday, with the release of Pending Home Sales.
Financial leaders and central bankers met at Jackson Hole for a conference, and the markets were all ears as Fed chair Janet Yellen delivered the keynote address on Friday. Any hopes for some dramatic news were dashed, as Yellen did not provide any clues as to the timing of a rate hike. She reiterated that the US job market still needed to improve, so employment numbers remain a crucial factor in any rate move by the Fed. There is a divergence in monetary stance between the ECB on the one hand, and the Fed and the BOE on the other. The markets are expecting the Fed and BOE to tighten monetary policy sometime in 2015, while the ECB may be forced to provide stimulus to prop up the sagging Eurozone economy.
GBP/USD for Tuesday, August 26, 2014
GBP/USD August 26 at 15:30 GMT
GBP/USD 1.6572 H: 1.6596 L: 1.6566
- GBP/USD is choppy has not been able to muster any momentum on Tuesday. The pair touched a high of 1.6596 during the Asian session.
- On the downside, 1.6565 remains under strong pressure and could break during the day. 16484 is stronger.
- The round number of 1.67 is a strong resistance line.
- Current range: 1.6565 to 1.6700.
Further levels in both directions:
- Below: 1.6565, 1.6484, 1.6382 and 1.6263
- Above: 1.6700, 1.6825, 1.6920 and 1.7000
OANDA’s Open Positions Ratio
GBP/USD is unchanged in Tuesday trade, continuing the trend seen a day earlier. This is consistent with the movement of the pair, which is showing limited activity. The ratio has a large majority of long positions, indicative of trader bias towards the pound moving to higher ground.
- 8:30 British BBA Mortgage Approvals. Estimate 442.K. Actual 42.8K.
- 12:30 US Core Durable Goods Orders. Estimate +0.5%. Actual -0.8%.
- 12:30 US Durable Goods Orders. Estimate 7.4%. Actual 22.6%.
- 13:00 US HPI. Estimate 0.3%. Actual 0.4%
- 13:00 US S&P/CS Composite-20 HPI. Estimate 8.2%. Actual 8.1%.
- 13:59 US Richmond Manufacturing Index. Estimate 8 points. Actual 12 points.
- 14:00 US CB Consumer Confidence. Estimate 89.1 points. Actual 92.4 points.
* Key releases are highlighted in bold
*All release times are GMT