GBP/USD: Pound Unchanged On Mixed U.S. Numbers

 | Feb 21, 2019 01:14PM ET

GBP/USD is steady in the Thursday session, continuing the trend seen on Wednesday. In North American trade, the pair is trading at 1.3051, unchanged on the day. In economic news, the U.K posted a rare budget surplus in January. The surplus of GBP 15.8 beat the estimate of GBP 11.1 billion. In the U.S., durable goods orders improved to 1.2%, but fell short of the estimate of 1.6%. Core Durable Goods Orders rebounded with a gain of 0.1%, shy of the forecast of 0.3%. Unemployment claims dropped sharply to 216 thousand, a four-week low. However, the Philly Fed Manufacturing Index slipped to -4.1, its first decline since May 2016.

The Federal Reserve has presented a dovish stance in 2019, and this position was underscored in the minutes from the January 2019 policy meeting. Participants reiterated that the Fed will remain cautious, stating that a “patient approach to monetary policy” was appropriate. However, members added that if economic projections improved, the Fed could revise the “patient approach”. The minutes noted that the employment market had strengthened and economic activity was rising, but expected GDP in 2019 to slow down compared to 2018.

The pound has enjoyed a strong week, with gains of 1.4 percent. Investors have responded positively to strong data this week. On Thursday, the U.K. posted the largest January surplus on record. Earlier in the week, employment numbers were strong. Wage growth climbed 3.4% for a second straight month, while the unemployment rate remained pegged at 4.0%. Still, the uncertainty of Brexit remains a serious concern. With London and Brussels deadlocked over a withdrawal agreement, a no-deal scenario remains a strong possibility, which could have severe ramifications for the British economy and could send the pound sharply lower. With only five weeks left before Britain departs from the E.U., the pound could face some volatility in the near term.

GBP/USD Fundamentals

Thursday (February 21)

  • 4:30 British Public Sector Net Borrowing. Estimate -11.1B. Actual -15.8B
    8:30 US Core Durable Goods Orders. Estimate 0.3%. Actual 0.1%
  • 8:30 US Durable Goods Orders. Estimate 1.6%. Actual 1.2%
  • 8:30 US Philly Fed Manufacturing Index. Estimate 14.1
  • 8:30 US Unemployment Claims. Estimate 228K
  • 9:45 US Flash Manufacturing PMI. Estimate 54.9
  • 9:45 US Flash Services PMI. Estimate 54.4
  • 10:00 US CB Leading Index. Estimate 0.1%
  • 10:00 US Existing Home Sales. Estimate 5.01M
  • 10:30 US Crude Oil Inventories. Estimate 2.9M

*All release times are EST

*Key events are in bold

Get The News You Want
Read market moving news with a personalized feed of stocks you care about.
Get The App

GBP/USD for Thursday, February 21, 2019