Yesterday, the biggest data release had the least impact. As expected, the fed kept interest rates on hold and ‘tapered’ a further 10bn. However the US GDP release did have an impact, coming in at 0.1% instead of the expected 0.8%.
With this negative news GBP/USD broke into a potentially new range, edging ever closer to the hugely significant 1.6900 mark.
Today’s most significant release will again be related to USD. At 3pm we will have the ISM manufacturing survey – effectively a measure of business conditions in the manufacturing sector. This is expected to be positive, but may be overshadowed by the Fed Chairman speech at 2.30pm in which she is expected to reiterate the Fed’s view that there is still plenty of slack in the employment market AND inflation is still off target.
Data being released as you read may well be enough to push GBP/USD above the 1.6900 mark – UK Manufacturing PMI is the British equivalent of the above mentioned ISM manufacturing survey.
Toward the close, we will see markets position themselves for the typically volatile Non-farm payroll release in the US tomorrow.
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