Pound steadies following employment data

United States Dollar:

GBP/USD slipped from its highs on Wednesday after the UK average earnings index printed weaker than expected, outweighing the positive claimant count headline. The index was 0.3% vs. exp. 0.5% whilst the claimant count fell by 36.3k vs. exp. 27.1k. The unemployment rate was 6.5%, as expected, and so this positive news prevented the pound from drifting too low. GBP remains buoyed by the strong inflation data released earlier in the week too. This latest earnings data is also unlikely to change the market’s view on when we’re likely to see a rate hike by the Bank of England, with many now seeing this coming before the year is out. GBP/USD fell to 1.7120 on the news and has fallen further overnight. Fed Chair Yellen was speaking again yesterday, this time testifying before the House Financial Services Committee. She said that the Fed were roughly on target to begin raising interest rates in the third quarter of 2015 but that it depends on the progress of the U.S. labour market. The USD has strengthened a little as a result and GBP/USD opens this morning at 1.7115. The better than expected producer price index, released yesterday supported bids in the dollar too, although industrial production printed a little shy of forecasts. There’s no UK economic data due for release this morning. There’s a smattering of indicators from the U.S. however that will keep markets interested, including the Philly Fed Manufacturing Index. `

We expect a range today in the GBP/USD rate of 1.7080 to 1.7155

Euro:

EUR/USD has continued its slide. It has so far fallen to a low of 1.3521 and doesn’t open too far off of this level this morning at 1.3535. Although fears over Portugal’s financial system were starting to fade yesterday, traders have continued to dump the currency, this following its recent break below the 1.36 figure earlier in the week. Offers in EUR/GBP have also weighed on the single currency but there’s been no one key reason for the latest slump in EUR/USD. European CPI is due this morning and if on the weak side we could see the pair break down through support at 1.35 – this inflation figure is due at 10am.

We expect a range today in the GBP/EUR rate of 1.2610 to 1.2675

Aussie and Kiwi Dollars:

Both AUD/USD and NZD/USD have been pretty much sidelined again. The kiwi is a tad lower following weaker than expected NZ consumer confidence data. AUD/USD meanwhile is a touch higher and trades at .9370 this morning. There’s been no major catalyst but to be honest these are very narrow ranges. GBP/AUD and GBP/NZD are both steady too at 1.9690 and 1.8270.

We expect a range today in the GBP/AUD rate of 1.8200 to 1.8340

We expect a range today in the GBP/NZD rate of 1.9550 to 1.9745

Data Releases for the next 24 hours:

AUD: No data

EUR: CPI y/y

GBP: No data

NZD: No data

USD: Building Permits, Unemployment Claims, Housing Starts, Philly Fed Manufacturing Index