The British pound (GBP) declined by 0.1% on Thursday, even though U.S. Jobless Claims figures were higher than expected.
Possible effects for traders
On Thursday, the U.S. Dollar Index (DXY) declined slightly, weakened by the higher-than-anticipated weekly U.S. Jobless Claims. Also, the market believes the Federal Reserve (Fed) will be more dovish with the monetary policy from now on, so the U.S. dollar is declining. Expectations of interest rate cuts by the U.S. central bank favour the British pound, as rate futures suggest that the Fed may begin to cut rates sooner than the Bank of England (BOE). The BOE’s Deputy Governor, Dave Ramsden, said yesterday that the U.K. monetary policy must remain restrictive for a prolonged duration.
During the early European trading session, GBPUSD declined as the U.K. Retail Sales figures came out lower than anticipated. Today, traders should focus on the upcoming U.S. Building Permits report at 1:30 p.m. UTC. If the figures exceed expectations, GBPUSD may drop below 1.23400. Contrarily, lower-than-expected Building Permits numbers could sustain the current short-term upward trend in GBPUSD.
