By FXEmpire.com
Introduction: While the ranges are wider (and so should stops be), the lines are rather distinctive, especially towards the borders of the long term wide range. This pair makes for good trades, with the new austerity program implemented in the UK, the GBP is moving more on Fundamentals now.
- The interest rate differential between the Bank of England(BoE) and the Federal Reserve
- High yield and attractive growth in the UK drives GBP/USD higher
Weekly Analysis and Recommendation:
The GBP/USD continued to show some strength holding at the top of the 1.61 price to close the week at 1.6148. The end of last week and the upcoming week are all about the BoE. With little in the way of supporting data from the UK, the pound was at the whim of the US.
The USD picked up momentum on Friday, ignoring tragic results from the Nonfarm report.
U.S. productivity fell 0.5% in the first quarter, but none of the decline occurred in manufacturing, the Labor Department said Thursday. Economists surveyed by MarketWatch expected productivity to fall by 1.0%.
Growth in the U.S. services sector slowed in April, with a weakening pace of production, new orders and employment, according to a key index released Thursday.
The number of Americans who filed requests for jobless benefits fell last week for the first time in a month, down 27,000 to 365,000, the U.S. Labor Department said Thursday. Claims from two weeks ago were revised up to 392,000 from 388,000
U.S. employers planned to cut 40,559 jobs in April, an 11% increase from a year ago, according to the latest report from outplacement firm Challenger, Gray & Christmas Inc. The April total is also up 7.1% from the 37,880 job cuts announced in March.
Major Economic Events for the past week actual v. forecast
|
AUD |
Interest Rate Decision |
3.75% |
4.00% |
4.25% |
|
USD |
ISM Manufacturing Index |
54.8 |
53.0 |
53.4 |
|
USD |
ADP Nonfarm Employment Change |
119K |
177K |
201K |
|
NZD |
Unemployment Rate |
6.7% |
6.3% |
6.4% |
|
EUR |
Interest Rate Decision |
1.00% |
1.00% |
1.00% |
|
USD |
Initial Jobless Claims |
365K |
380K |
392K |
|
USD |
Nonfarm Payrolls |
115K |
170K |
154K |
|
USD |
Unemployment Rate |
8.1% |
8.2% |
8.2% |
|
Ivey PMI |
52.7 |
61.0 |
63.5 |
Historical:
Highest: 1.681 USD on 17 Nov 2009.
Average: 1.5807 USD over this period
Economic Highlights of the coming week that affect the Euro, GBP, CHF and the USD
|
May 7 |
7:00 |
CHF |
Foreign Currency Reserves |
237.5B |
|
7:15 |
CHF |
CPI m/m |
0.6% |
|
|
May 10 |
8:30 |
GBP |
Manufacturing Production m/m |
-1.0% |
|
11:00 |
GBP |
Official Bank Rate |
0.50% |
|
|
12:30 |
USD |
Trade Balance |
-46.0B |
|
|
12:30 |
USD |
Unemployment Claims |
365K |
|
|
May 11 |
8:30 |
GBP |
PPI Input m/m |
1.9% |
|
12:30 |
USD |
PPI m/m |
0.0% |
|
|
13:55 |
USD |
Prelim UoM Consumer Sentiment |
76.4 |
Upcoming Government Bond Auctions
Date Time Country
May 08 09:15 Austria
May 08 09:30 Belgium
May 08 14:30 UK
May 08 15:30 Italy
May 08 17:00 US
May 09 09:10 Sweden
May 09 09:30 Germany
May 09 09:30 Swiss
May 09 09:30 UK
May 09 14:30 Sweden
May 09 15:30 Italy
May 09 17:00 US
May 10 15:00 US
May 10 17:00 US
May 11 09:10 Italy BOT auction
May 11 10:00 Belgium
Originally posted here
