GBP/USD is unchanged on Friday, as the pair trades at the 1.54 line in the European session. In economic news, US Unemployment Claims beat the estimate for a third straight week and housing numbers looked sharp. There is only one US release to wind up the week, Manufacturing PMI. Little change is expected in the October report. There are no British releases on Friday.
Earlier this week, BOE Governor Mark Carney weighed in on the “Brexit” debate regarding the UK continuing to remain a member of the European Union. Carney said that he was in favor of the UK staying in the bloc, noting that the UK had benefited from the continent’s free movement of goods, services and capital. Not surprisingly, Finance Minister George Osborne was quick to praise Carney’s remarks. The British government has promised a referendum on whether the country should remain in the EU in 2017, and a public stance by the BOE in favor of the UK staying in the EU will be important for the “Yes” vote.
There was positive news out of the US on Thursday, as Unemployment Claims, a key release, came in at 259 thousand, beating the estimate of 266 thousand. This was slightly higher than the previous reading of 255 thousand, but marked the third straight week that the indicator beat the forecast. The four-week moving average of claims, which reduces the volatility of the weekly jobless reports, is currently at its lowest level since 1973. These figures point to a stronger labor market, but the next big test comes in early November, with the publication of Nonfarm Payrolls. Meanwhile, Existing Housing Sales had a banner September, improving to 5.55 million, crushing the estimate of 5.38 million. We’ll get a look at additional housing indicators next week.
Recent US data has not been has strong as hoped, with key numbers sending a mixed message about the health of the economy. This has reduced the likelihood of a rate hike by the Federal Reserve before the end of 2015. The markets remain frustrated about the Fed’s lack of communication with the markets, as FOMC members continue to send out contradictory messages about the Fed’s plans. Still, an improvement in US numbers, especially employment and consumer indicators, could quickly revive speculation about a rate hike and boost the US dollar. Next week promises to be interesting, as the Federal Reserve issues a policy statement after its meeting. This will be followed by the release of the Advance GDP report, a market-mover event.
Friday (Oct. 23)
13:45 US Flash Manufacturing PMI. Estimate 52.8 points.
*Key releases are highlighted in bold
*All release times are GMT
GBP/USD for Friday, October 23, 2015
GBP/USD October 23 at 10:25 GMT
GBP/USD 1.5397 H: 1.5416 L: 1.5379
- GBP/USD has shown limited movement in the Asian and European sessions, as the pair stays close to the 1.54 line.
- On the upside, 1.5485 has some breathing room.
- 1.5341 is a weak support level.
- Current range: 1.5341 to 1.5485
Further levels in both directions:
- Below: 1.5341, 1.5269, 1.5163 and 1.5026
- Above: 1.5485, 1.5590 and 1.5660
OANDA’s Open Positions Ratio
GBP/USD ratio is unchanged on Friday. The ratio remains close to an even split between short and long positions, pointing to a lack of trader bias as to what to expect from GBP/USD.
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