GBP/USD has posted slight gains on Wednesday, recovering some of the losses seen on Tuesday. In the North American session, the pair is trading at 1.2991, up 0.09% on the day. On the release front, British Services PMI dropped to 53.9, close to the estimate of 54.0 points. In the U.S, ADP nonfarm payrolls jumped 230 thousand, crushing the estimate of 185 thousand. This marked the strongest increase in private sector jobs since March. There was more positive news from the services sector, as ISM Non-Manufacturing PMI climbed to 61.6, above the forecast of 58.0 points. On Thursday, the U.S releases unemployment claims.
British PMIs, which are highly regarded gauges of economic activity, all showed expansion in September. Services PMI slipped to 53.9, but was within expectations. Manufacturing PMI improved to 53.8, above the estimate of 52.6 points. Construction PMI dropped sharply from 52.9 to 52.1, missing the estimate of 52.8 points. Even though the PMIs continue to show growth in key economic sectors, there are signs of concern. The construction release was the weakest in six months, and the survey found that some construction firms were concerned that soft economic conditions were having a negative impact on their growth. Brexit remains a constant worry in the business sector, as the uncertainty as to whether a deal will be reached between the UK and the European Union continues to dampen sentiment over the British economy.
Prime Minister May finds herself in a difficult position, as she tries to convince her Conservative party and European leaders to accept her “Chequers” proposal regarding the UK exit from the European Union in March 2019. At the Conservative party conference on Wednesday, May said she wanted a deal with Europe, but not at any price. With Europeans leaders openly stating that Britain must be seen as paying a cost for leaving Europe, it’s an open a question whether Britain and the EU will be able to hammer out an agreement.
Euro jumps as Italy revises budget plans
A tempest in a cappuccino cup or mama mia, here we go again?
ADP employment increased by 230,000 in September
Wednesday (October 3)
- 4:30 British Services PMI. Estimate 54.0. Actual 53.9
- 8:15 ADP Nonfarm Employment Change. Estimate 185K. Actual 230K
- 9:45 US Final Services PMI. Estimate 52.9. Actual 53.5
- 10:00 US ISM Nonfarm Manufacturing PMI. Estimate 58.0. Actual 61.6
- 10:30 US Crude Oil Inventories. Estimate 1.1M
- 14:00 US FOMC Member Lael Brainard Speaks
- 14:15 US FOMC Member Loretta Mester Speaks
- 16:00 US Fed Chair Powell Speaks
Thursday (October 4)
- 8:30 US Unemployment Claims. Estimate 214K
*All release times are DST
*Key events are in bold
GBP/USD for Wednesday, October 3, 2018
GBP/USD October 3 at 11:50 DST
Open: 1.2979 High: 1.3023 Low: 1.2963 Close: 1.2991
GBP/USD edged higher in the Asian session but gave up these gains in European trade. The pair has ticked higher in North American trade
- 1.2966 is providing support
- 1.3088 is the next resistance line
- Current range: 1.2966 to 1.3088
Further levels in both directions:
- Below: 1.2966, 1.2852 and 1.2723
- Above: 1.3088, 1.3173, 1.3301, 1.3458
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.