The dollar firmed on news that jobless claims fell to their lowest level since 2000. Initial claims were 271,000, down 36,000 on the previous week. On the other side of the coin, the “Phillidelphia Fed’ ” survey showed a slowing in manufacturing in the area.
Traders are currently pricing in a highly likelyhood of another quarter point rise in US rates at the Fed’ meeting end of this month. The chanced of another rise at the March meeting is around 60%.
The new Bin Laden audiotape caused some dollar weakness for a while yesterday afternoon, but markets are now taking the treat of terrorism in their stride, and the dollar srugged off initial losses.
UK Retail Sales came out slightly below median estimates this morning, but showed a 4% year on year gain for December, indicating a strengthening retail environment.
Data is scarce today, with the University of Michigan’s consumer confidence figure released at 14:15. This could help to give the dollar some direction. Analysts are expecting a rise to 92, from 91.5 last month
GBPEUR – Support 1.4500 then 1.4470
Resistance 1.4615 then 1.4680
GBPUSD – Support 1.7512 then 1.7485
Resistance 1.7600 then 1.7705
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