Pound Continues To Drift

 | Feb 11, 2015 12:49PM ET

The pound is showing limited movement on Wednesday, as GBP/USD is trading in the mid-1.52 range. On the release front, it was a quiet day. The sole British release, the 30-year bond auction, dipped to 2.37%. In the US, there were no major releases on the schedule. crude oil Inventories slipped to 4.9 million in January.

US employment numbers continue to impress, as JOLTS Jobs Openings climbed to 5.05 million, matching expectations. This was the indicator’s highest level since 2001, and points to more available jobs due to an increase in demand for goods and services. The strong reading follows a solid US Nonfarm Payrolls report for January, which was released on Friday. The key employment indicator improved to 257 thousand in January, up from 252 thousand a month earlier. This easily beat the estimate of 236 thousand. The Federal Reserve has been clear that the employment numbers will have to be strong before a rate hike kicks in, so these strong employment releases reinforce expectations for an interest rate in mid-2015, which would be a major boost for the US dollar.

Earlier in the week, British Manufacturing Production, a key indicator, slipped to 0.1% in December, down from 0.1% a month earlier. The markets had expected a gain of 0.3%. There was no relief from British Industrial Production, which came in at -0.2%, marking a third straight decline. Meanwhile, the NIESR GDP Estimate, which helps track GDP on a monthly basis, posted a strong gain of 0.7% in the January report.