It was not the ‘Super Thursday’ we have been looking for with the British pound reluctant to find a clear direction. Consequently, sterling traders had to struggle with choppy sideways swings and false breakouts as fresh momentum lacked to either side.
The Bank of England slowed its bond-buying and signaled it is on course to end the stimulus later this year. The slowdown in bond purchases and the big forecast upgrade suggest increasing confidence about the economic outlook in the U.K. but there was no response in the market. While the BoE introduced a bit of taper talk there was no hawkish surprise that could have led to bigger moves.
A problem could also be the convergence of seasonal and structural liquidity conditions in the market that has led to narrow trading ranges in many trading instruments. Let’s see whether the U.S. dollar is in store for some more heightened market activity today.
All eyes will be on the U.S. employment report, scheduled for release at 12:30 UTC. Economists predict the NFP report will show the U.S. added about 1 million jobs last month. A key detail will be Average Hourly Earnings while a higher-than anticipated reading could trigger a reaction in the U.S. Treasury bond yields and thus impact on the U.S. dollar.
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