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GBP/USD – Pound Slips, Recovers After Carney Rate Remarks

The British pound has had a busy Wednesday. In the North American session, GBP/USD is trading in the mid-1.61 range. The pound slipped about 100 points earlier in the day, but recovered after BoE Governor Mark Carney testified at the Inflation Report Hearings that the point that interest rates will be raised has moved closer. There are no major releases out of the US on Wednesday.

US numbers continue to point to a deepening recovery, but the labor market is showing some troubling signs. JOLTS Job Openings was unchanged in August at 4.67 million, short of the estimate of 4.72 million. On Friday, the eagerly-anticipated Nonfarm Employment Change crashed to 142 thousand, its lowest gain since January. This surprised the markets, which had expected a gain of 226 thousand. The disappointing release follows a weak ADP Nonfarm Payrolls report as well as a rise in unemployment claims.

British Manufacturing Production, a key event, was unchanged last month, posting another gain of 0.3%. This matched the forecast. There was positive news from the NIESR GDP Estimate, which rose to 0.6%, up from 0.5% last month. At the same time, the trade deficit rose to 10.2 billion pounds, compared to 9.4 billion last month. The markets had expected the deficit to fall to 9.1 billion.

The pound’s latest troubles are blowing south from Scotland, as Scottish voters will vote in a referendum on independence on September 18th. Polls taken on the weekend show that supporters of independence are gaining ground and hold a slight majority. If voters do choose to secede from the UK, this would create a lot of questions and uncertainty, including what currency an independent Scotland would use. As voting day looms closer, we are likely to see more pressure on the pound [1].

 

GBP/USD for Wednesday, September 10, 2014

GBP/USD September 10 at 15:25 GMT

GBP/USD 1.6137 H: 1.6170 L: 1.6052

 

GBP/USD Technical

S3 S2 S1 R1 R2 R3
1.5731 1.5864 1.6000 1.6141 1.6263 1.6382

 

Further levels in both directions:

 

OANDA’s Open Positions Ratio

GBP/USD ratio is pointing to gains in short positions on Wednesday. This is not consistent with the pair’s movement, as the pound has made slight gains. The ratio has a majority of long positions, indicative of trader bias towards the pound moving higher.

 

GBP/USD Fundamentals

* Key releases are highlighted in bold

*All release times are GMT

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.

Kenny Fisher

Kenny Fisher [5]

Market Analyst at OANDA [6]
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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