An event to look out for today:
15:30 GMT+3. USD – Unemployment Rate
GBPUSD:
The GBP/USD pair is showing modest gains near 1.3130, breaking a three-day losing streak in the early Asian session on Friday. However, the major pair’s gains may be limited as traders await the release of US Non-Farm Payrolls (NFP) data due later on Friday.
Initial jobless claims in the US rose by 6,000 to 225,000 for the week ended 28 September. The figure followed the previous week’s data of 219,000 (revised from 218,000) and was worse than market expectations of 220,000.
Federal Reserve (Fed) Chairman Jerome Powell said earlier this week that the recent half per cent interest rate cut should not be interpreted as a sign that future moves will be just as aggressive. Powell also said that if economic data remains unchanged, there will likely be two more rate cuts this year, but they will be smaller. Lower rates on the Fed’s sharp rate cuts could support the dollar in the near term.
Encouraging economic data from the US on Thursday is supporting the dollar. Data from the Institute for Supply Management (ISM) showed that the US Services Purchasing Managers’ Index (PMI) rose to 54.9 in September from 51.5 previously. The figure was above the market consensus of 51.7.
The Pound Sterling (GBP) fell to two-week lows on Thursday following a speech from Bank of England (BoE) Governor Andrew Bailey. Bailey said that the UK central bank may take a more aggressive approach to cutting interest rates as inflation remains low. Bailey’s remarks raised expectations of a quarter-point rate cut in November and a high chance of a sequential cut in December.
Trading recommendation: Trade predominantly with Sell orders from the current price level
Origin: FreshForex
