Home/Central banks/FX/GBP/News events/Newsfeed/Non-farm payrolls/Technical analysis/USD

GBP/USD lower after strong US Mfg. PMI rises

Share Print 0

The British pound continues to drift this week. In the North American session, GBP/USD is trading at 1.3103, down 0.33% on the day.

UK BRC retail sales jump

The British Retail Consortium reported a strong gain in retail sales for August. Retail sales rose 0.8% y/y, up from 0.3% in July to the highest level in five months. Food and clothing sales picked up as people took advantage of the warm summer weather. Still, consumer confidence remains fragile and consumers remain cautious about discretionary spending.

The jump in retail sales could be a precursor of what to expect from the official retail sales report on Sept. 20. Retail sales rebounded in July with a gain of 1.4% y/y, up sharply from a revised 0.3% decline a month earlier.

In the US, it was back to work today after the Labor Day holiday. The ISM Manufacturing PMI rose slightly to 47.2, up from 46.8 but shy of the market estimate of 47.5. Manufacturing has been in deep freeze for most of the past 18 months, as the services sector has carried the US economy.

Investors are keeping a close eye on this week’s employment report, specifically the August nonfarm payrolls. The July reading of 114,000 was much lower than expected and the lowest reading in over three years. Investors panicked about the health of the US economy and the financial markets plunged but managed to recover quickly.

The markets are understandably nervous ahead of the jobs report, although the market estimate for nonfarm payrolls stands at 160,000, which would mark an improvement from July. If the release is within expectations, it should cement a 25-basis point cut from the Federal Reserve later this month. Another soft reading, however, could cause panic in the markets and put pressure on the Fed to deliver a 50-bps cut at the meeting.

GBP/USD Technical

  •  There is resistance at 1.3167 and 1.3225
  • 1.3069 and 1.3011 are providing support

Content 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 Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.

Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental and macroeconomic analysis, Kenny Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in major online financial publications including Investing.com, Seeking Alpha and FXStreet. Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

Latest posts by Kenny Fisher (see all)

, , ,
Back to Top