Forex Market: GBP/USD daily trading outlook

Written by Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: October 30, 2024

Yesterday’s trade saw GBP/USD within the range of 1.4404-1.4635. The pair closed at 1.4594, surging 0.90% on a daily basis. It has been the 21st gain in the past 39 trading days, a third consecutive one and also the sharpest one since March 29th, when the pair rose 0.92%. The daily high has been the highest level since May 3rd, when a high of 1.4770 was registered. The major pair has pared its loss to 0.14% so far during the current month, following two consecutive months of advance.

At 6:26 GMT today GBP/USD was inching down 0.05% on the day to trade at 1.4587. The pair touched a daily high at 1.4607 during the early phase of the Asian trading session and a daily low at 1.4566 during late Asian trade.

On Thursday GBP/USD trading may be influenced by the following macroeconomic reports as listed below.

Fundamentals

United Kingdom

Retail Sales

Annualized retail sales in the United Kingdom probably rose at a rate of 2.5% in April, according to the median forecast by experts, after in March sales increased by another 2.7%. If expectations were met, April would be the 37th consecutive month of sales growth, but yet, the slowest one since September 2014, when the index rose at a revised down annual rate of 2.3% (2.7% previously).

In monthly terms, retail sales probably rose 0.5% in April, according to market expectations. In March retail sales shrank 1.3%, or at the fastest monthly rate since December 2015, when the indicator dropped at a revised up 1.4%. Marchs index performance came as a result of a 1.9% slump in food sales and a 1.5% drop at non-food stores. More specifically, sales of household goods went down 2.9%, while sales of clothing and footwear shrank 2.3%.

Annualized retail sales, without taking into account fuel sales, probably surged 1.9% in April, following a 1.8% increase in March. If expectations were met, April would be the 48th consecutive month of growth in annual core sales.

Retail sales represent a short-term indicator, which provides key information about consumption on a national scale. Higher retail sales suggest stronger consumer demand, confidence and economic growth, respectively. Therefore, in case the general index of retail sales increased at a faster-than-expected pace, this would have a strong bullish effect on the sterling. The Office for National Statistics is expected to publish the official report at 8:30 GMT.

United States

Initial, Continuing Jobless Claims

The number of people in the United States, who filed for unemployment assistance for the first time during the business week ended on May 13th, probably fell to 275 000, according to market consensus, from 294 000 in the preceding week. The latter has been the highest number of claims since the business week ended on January 15th, when the revised up 294 000 claims were reported.

The 4-week moving average, an indicator lacking seasonal effects, was 268 250, marking an increase by 10 250 compared to the preceding weeks unrevised average.

The business week, which ended on May 6th has been the 62nd consecutive week, when jobless claims stood below the 300 000 threshold, which suggested a healthy labor market. It has been the longest streak in 43 years.

Initial jobless claims number is a short-term indicator, reflecting lay-offs in the country. In case the number of claims met expectations or decreased further, this would have a moderate bullish effect on the US dollar.

The number of continuing jobless claims probably rose to the seasonally adjusted 2 163 000 during the business week ended on May 6th, according to the median forecast by experts, from 2 161 000 in the preceding week. The latter has been the highest level since the business week ended on April 1st, when 2 176 000 claims were reported. The figure also represented an increase by 37 000 compared to the revised up number of claims reported in the week ended on April 22nd. This indicator reflects the actual number of people unemployed and currently receiving unemployment benefits, who filed for unemployment assistance at least two weeks ago.

The US Department of Labor is to release the weekly report at 12:30 GMT.

Philadelphia Fed Manufacturing Index

The Philadelphia Fed Manufacturing Index probably improved to a reading of 3.5 in May, according to the median forecast by experts, after unexpectedly falling to a reading of -1.6 in April. The index is based on a monthly business survey (the Business Outlook Survey), measuring manufacturing activity in the third district of the Federal Reserve, Philadelphia. Participants give their opinion about the direction of business changes in overall economy and different indicators of activity in their companies, such as employment, working hours, new and existing orders, deliveries, inventories, delivery time, price etc. The survey is conducted every month since May 1968. The results are presented as the difference between the percentages of positive and negative projections. A level above zero is indicative of improving conditions, while a level below zero is indicative of worsening conditions. In case the index improved more than projected, this would have a moderate bullish effect on the US dollar. The Federal Reserve Bank of Philadelphia is expected to release the official results from the survey at 12:30 GMT.