GBP/USD has edged highly on Monday, as the pair is trade in the mid-1.6800 range in the North American session. Trading volume is light markets in both the US and the UK are closed for holidays, so there are not releases until Tuesday.
US employment releases disappointed on Thursday. Unemployment Claims has look sharp over the past two release, but the short streak came to an end, as the key employment indicator climbed to 326 thousand, up from 297 thousand a week earlier
. This missed the estimate of 312 thousand. With future QE tapers by the Federal Reserve contingent on solid economic data, key employment releases such as Unemployment Claims will continue to be closely scrutinized by the markets. Elsewhere, key housing data was a mix, as Existing Home Sales fell short of expectations, while New Home Sales improvement sharply in April and easily beat the estimate.
The Federal Reserve minutes were released on Wednesday, and there was no dramatic response from the markets. In the minutes, policymakers discussed an exit strategy from its QE stimulus program, which is set to terminate at the end of 2014. This will likely mean an increase in interest rates, but the minutes didn't provide a timetable as to when rates might go up, and by how much. Low inflation levels means there is less pressure on the Fed to raise rates next year, but the economic conditions could change in the meantime. The Federal Reserve remains comfortable with its accommodative stance, and will want to see stronger growth and employment numbers before making changes to monetary policy, such as raising rates.
British Second Estimate GDP is often a market-mover, but this time the pound failed to take advantage of another strong reading. The indicator posted a healthy gaining of 0.8% in Q1, matching the forecast and keeping line with the past three readings. The GDP release is another indication that the British economy recovering at a good clip, so speculation about a rate hike from the BOE will continue to pre-occupy the markets.
US employment releases disappointed on Thursday. Unemployment Claims has look sharp over the past two release, but the short streak came to an end, as the key employment indicator climbed to 326 thousand, up from 297 thousand a week earlier
. This missed the estimate of 312 thousand. With future QE tapers by the Federal Reserve contingent on solid economic data, key employment releases such as Unemployment Claims will continue to be closely scrutinized by the markets. Elsewhere, key housing data was a mix, as Existing Home Sales fell short of expectations, while New Home Sales improvement sharply in April and easily beat the estimate.
The Federal Reserve minutes were released on Wednesday, and there was no dramatic response from the markets. In the minutes, policymakers discussed an exit strategy from its QE stimulus program, which is set to terminate at the end of 2014. This will likely mean an increase in interest rates, but the minutes didn't provide a timetable as to when rates might go up, and by how much. Low inflation levels means there is less pressure on the Fed to raise rates next year, but the economic conditions could change in the meantime. The Federal Reserve remains comfortable with its accommodative stance, and will want to see stronger growth and employment numbers before making changes to monetary policy, such as raising rates.
British Second Estimate GDP is often a market-mover, but this time the pound failed to take advantage of another strong reading. The indicator posted a healthy gaining of 0.8% in Q1, matching the forecast and keeping line with the past three readings. The GDP release is another indication that the British economy recovering at a good clip, so speculation about a rate hike from the BOE will continue to pre-occupy the markets.
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