Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Forex snapshot

Federal Reserve tapering has put pressure on GBP/USD and EUR/USD.

A US dollar and ten pound note
Source: Bloomberg

Pound above $1.69 post FOMC

GBP/USD is holding above the $1.69 mark as the Federal Reserve gave little away during last night's meeting.

Adding to the pound's woes were the lower-than-expected Nationwide house price index data for July. It would appear that Mark Carney’s plans to cool the UK housing market are working.

There were no surprises from the Federal Reserve last night. The quantitative easing package was trimmed by $10 billion and interest rates remained unchanged, but Janet Yellen gave no clear indication of when interest rates would rise.

The US jobless claims report at 1.30pm (London time) is the figure to watch ahead of tomorrow’s non-farm payrolls report. The consensus is for a reading of 303,000 people claiming jobless benefits.

Alastair McCaig stated that the $1.6920 level was acting as support yesterday, and it has now become a point of resistance. Strong jobless claims could push the pound to $1.6788.

Spot FX GBP/USD chart

Euro helped by German jobs report

The euro is trading at $1.3394 after Germany revealed a decline of 12,000 in unemployment. This set the tone for the eurozone unemployment and CPI data which came in at 11.5% and 0.4% respectively, however the drop in inflation is worrying. The euro has managed to trade higher following the announcements but I suspect this will be short lived as European Central Bank continues to focus on deflation. 

If the euro takes out the $1.3375 level the next area to watch is $1.3317, with $1.3440 is acting as resistance.

Spot FX EUR/USD chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts