GBP/USD has posted modest gains in Friday trading, as the pair trades in the mid-1.63 range in Friday trading. UK releases ended a strong week with more good news, as Halifax HPI registered a seven-month high. In the US, Unemployment Claims posted a third straight drop and the markets are hoping for more good news on Friday from Non-Farm Employment Change and the Unemployment Rate. As well, UoM Consumer Sentiment, a key event, will be released.
In the UK, the Halifax Housing Price Index jumped 1.1%, its highest gain since April. This strong reading surpassed the estimate of 0.8% and points to increased activity in the British housing market. Consumer Inflation Expectations remains strong, with a gain of 3.6% in November. This could be an indication that consumers are finally "buying in" to the improving economy and that consumer confidence and spending is on the increase.
There were no surprises from the BOE, which set the monthly QE and interest rates on Thursday. The Bank maintained QE at 375 billion pounds, while the benchmark interest rate remained pegged at 0.50%. In the Autumn Forecast Statement, UK Treasurer George Osborne said that the government's economic policies had propelled the British economy, which has shown faster growth than any of the developed economies. The government has revised its growth forecast to 1.4% for 2013, double the 0.6% which was projected in March. For 2014, the growth is projected to hit 2.4%, up from 1.8%. The sharp economic growth has boosted confidence in the British pound, which has enjoyed excellent gains against the US dollar since mid-November.
Over in the US, employment numbers continue to show improve, as Unemployment Claims dropped for the third consecutive week. The key indicator dropped from 316 to 298 thousand, easily beating the estimate of 328 thousand and posting a two-month low. There was further good news, as GDP shot up 3.6% in Q3. On Friday, we'll get a look at Non-Farm Payrolls and the Unemployment Rate. If these indicators point upwards, the greenback could move higher.
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GBP/USD December 6 at 12:00 GMT
GBP/USD 1.6319 H: 1.6370 L: 1.6361
- GBP/USD has reversed directions and has posted gains on Friday. The pair touched a high of 1.6370 earlier in the European session.
- The pair is testing support at the key line of 1.6300 and we could see this line fall during the day. This is followed by stronger support at 1.6231.
- On the upside, the pair faces resistance at 1.6476. This is followed by resistance at the round number of 1.6600, which has remained intact since August 2011.
- Current range: 1.6300 to 1.6476
OANDA's Open Positions Ratio
GBP/USD ratio is pointing to gains in long positions in Friday trading, continuing the trend we saw on Thursday. This is reflected in the pair's current movement, as the pound has posted gains. Short positions continue to dominate the ratio, reflecting a trader bias towards the US dollar moving to higher ground at the expense of the pound.
The pound has started Friday with gains against the dollar. We could see some volatility from the pair during the North American session, as the US releases key employment and consumer confidence data.
GBP/USD Fundamentals
- 8:00 British Halifax HPI. Estimate 0.8%. Actual 1.1%.
- 9:30 British Consumer Inflation Expectations. Actual 3.6%.
- 13:30 US Non-Farm Employment Change. Estimate 180K.
- 13:30 US Unemployment Rate. Estimate 7.2%.
- 13:30 US Average Hourly Earnings. Estimate 0.2%.
- 13:30 US Core PCE Price Index. Estimate 0.1%.
- 13:30 US Personal Spending. Estimate 0.3%.
- 13:30 US Personal Income. Estimate 0.3%.
- 14:55 US UoM Preliminary Consumer Sentiment. Estimate 76.2 points.
- 14:55 US UoM Preliminary Inflation Expectations.
- 20:00 US FOMC Member Charles Evans Speaks.
- 20:00 US Consumer Credit. Estimate 14.6B.