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GBP/USD – British Pound Quiet, US Posts Mixed Data

The British pound has inched lower in the Wednesday session. In North American trade, GBP/USD is trading at 1.3951, down 0.08% on the day. On the release front, there are no British releases on the schedule. In the US, consumer spending was a disappointment, as Retail Sales declined 0.1%, missing the estimate of 0.3%. On the inflation front, PPI dipped to 0.2%, but still beat the estimate of 0.1%. On Thursday, the US will publish employment claims and the Philly Fed Manufacturing Index.

British finance minister Philip Hammond delivered the annual budget in parliament on Tuesday. There may not have been any surprises in the budget, but the economic forecasts were not particularly upbeat. According to the Office of Budget Responsibility, the country’s economic growth is expected to be weak – 1.5 percent in 2018, and just 1.3 percent in 2019 and 2020. The OECD didn’t make things any better for the government, when it said on Tuesday that Britain’s economy would grow more slowly than all the Group of 20 members in 2018. The economy has slowed since the Brexit vote in June 2016, taking the British pound down as well. With London and Brussels at odds over the relationship between the sides after Brexit takes effect in March 2019, the pound could be facing strong headwinds during the year.

The Federal Reserve is widely expected to raise interest rates next week. According to the CME Group, the odds of a quarter-point raise stand at 89 percent. What can we expect from the Fed during the year? The pressing question is how many rate hikes will we see in 2018. The current Fed projection remains at three hikes, but the superb nonfarm payrolls report last week has raised speculation that the Fed could accelerate the pace to four hikes, which would be good news for the US dollar. Investors will be keeping a close eye on key US data, especially inflation indicators. If these numbers improve, we’re likely to see four rate hikes in 2018.

GBP/USD Fundamentals

Wednesday (March 14)

Thursday (March 15)

*All release times are GMT

*Key events are in bold

GBP/USD for Wednesday, March 14, 2018

GBP/USD March 14 at 12:25 EDT

Open: 1.3962 High: 1.3996 Low: 1.3926 Close: 1.3951

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3744 1.3809 1.3901 1.4010 1.4128 1.4227

GBP/USD posted slight gains in the Asian but gave away these gains in the European session. The pair has posted slight losses in North American trade

Further levels in both directions:

OANDA’s Open Positions Ratio

GBP/USD ratio is showing little movement this week. Currently, short positions have a small majority (51%), indicative of a lack of bias towards the direction of the pair.

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 [4]

Market Analyst at OANDA [5]
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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