All Eyes On BOE Meeting, Sterling Stuck In Range
The Office for National Statistics yesterday announced that UK industrial production rose 0.3% in March compared to the previous month. This did not meet economists’ expectations for a 0.7% increase. On yearly basis, the industrial production for March inched down 0.2%. The manufacturing sector witnessed a slump of 1.9% in March output, compared with the same period last year. The sharp decline in this sector was the main contributor to the decrease in total industrial production.
Data from the National Institute of Economic and Social Research (NIESR) indicated that NIESR’s estimate for the British GDP was for a growth of 0.3% in the three months ending in April 2016 after an increase of 0.4% in the three months ending in March 2016. This indicates that the nation’s economy is showing a slower pace of growth.
Today, the Bank of England (BOE) will hold a meeting on monetary policy with the markets holding high expectations from it. All eyes are focusing on some clues of “Brexit” before an official referendum in June. In addition, the UK benchmark rate is forecast to remain unchanged at 0.5%.
In the US, Department of the Treasury reported that the Federal budget surplus came in at $106.5 billion for March, lower than the expectation of $116.2 billion. In the preceding month, the US budget marked a deficit of -$108.0 billion.
The initial jobless claims for the week ending on May 06 are scheduled to be released today, the number of people filing for unemployment benefits is forecast to come in at 277,000, compared with 274,000 people in the week before.
In Thursday’s trading session, the dollar index DXY is fluctuating in a narrow range,and is currently at 93.95, 12 points higher than the last close.
Fig. GBPUSD D1 Technical Chart
Falling from the resistance of 1.47675 formed May 03, GBPUSD has been moving sideways inside a narrow range, ahead of the BOE meeting. The level 38.2% of Fibonacci retracement may become a solid support for the price, as the pair failed to close far below this level. The price is supposed to start rising soon, as the green arrow under the price chart still suggests a long position.
Buy at 1.44753, Stop loss at 1.43852, Take profit at 1.45558