The British pound has started the week in fine fashion, posting gains to start off the trading week. In Monday's North American session, GBP/USD is trading just under the 1.64 line. In economic news, it's a quiet Monday, with just two releases on the schedule. BOE Governor Mark Carney will address the Economic Club in New York, while FOMC member James Bullard will talk about monetary policy at an event in St. Louis.
In the U.S., employment numbers continue to shine last week. Following another strong Unemployment Claims release, Non-Farm Payrolls was almost unchanged, coming in at 203 thousand. This was well above the estimate of 180 thousand. The Unemployment Rate dropped from 7.3% to 7.0%, beating the estimate of 7.2%. The strong numbers are sure to increase the pressure on the Fed to taper QE when it meets later in December. The Fed has said that a stronger employment picture is a prerequisite to tapering, and last week's numbers certainly increase the possibility of the Fed taking action at its December policy meeting.
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, U.K. 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 which the U.K. has experienced has given a strong boost to the British pound, which has gained about 400 points against the U.S. dollar since mid-November.
GBP/USD for Monday, December 9, 2013
GBP/USD December 9 at 16:00 GMT
GBP/USD 1.6383 H: 1.6395 L: 1.6324
- GBP/USD has posted gains on Monday. The pound has touched a high of 1.6396 in the North American session, as the pound continues to put pressure on the dollar.
- The round number of 1.6300 is providing support. This is followed by a support level 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 Monday, continuing the trend we saw late last week. This is reflected in the pair's current movement, as the pound has moved to higher ground. Short positions continue to dominate the ratio, reflecting a trader bias towards the US dollar reversing directions and gaining ground.
The pound has posted gains on Monday, and is close to the 1.64 line. With no economic data being released on Monday, the pair's movement during the day is likely to be limited in scope.
- 17:15 BOE Governor Mark Carney Speaks.
- 18:05 US FOMC Member James Bullard Speaks.
*Key releases are highlighted in bold
*All release times are GMT
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