- GBP / USD hovers around 1.3709 as the European session closes.
- The aggressiveness of the BoE boosts the outlook for the British pound.
- US durable goods orders in August expanded 1.8%, up from 0.5% in July.
- Chicago Fed Chairman Evans said the US economy is close to meeting the Fed’s standard for bond phasing.
After closing on his back foot in the last week, the GBP/USD it is recovering, trading 1.3704 up 0.12% at time of writing.
The market mood is optimistic as European indices are trading higher, while in the US it is a mixed bag. The Dow Jones Industrial Average (DJIA) rose to 35,041.12, gaining 0.70%, while the S&P 500 and the Nasdaq were down 0.09% and 0.95%, respectively.
US Dollar Index Maintains Last Week’s Gains
The US Dollar Index (DXY), which measures the performance of the dollar against a basket of six pairs, is stable at 0.14% to 93.40, supported by rising returns with the yield on US 10-year Treasuries registering gains from 1.20% to 1.478%.
In the UK, the economic agenda is empty. However, there was news that 50-90% of natural gas stations are drying up in some areas, and this shortage could derail the recovery.
On Thursday of last week, the Bank of England kept interest rates and its bond purchases unchanged. However, he hinted that there could be a hike in the cards, even before the central bank cuts its bond buying program. The decision is influenced by the rise in prices, as the Bank of England expects inflation to rise to 4%.
Meanwhile, the US Census Bureau released durable good orders data for August, the numbers rising 1.8% more than the 0.7% forecast by analysts, topping the prior month’s reading of 0.5%. Excluding defense, new orders increased 2.4% versus -0.5% expected. The demand for durable goods has expanded in 15 of the last 16 months.
Early in the New York session, Chicago Fed Chairman Charles Evans made remarks.
He commented that the US economy is close to meeting the Fed’s bar to begin reducing its bond purchase program. Also, an improvement in the labor market will likely reach the bar soon to be set by the central bank, and bond downsizing may begin.
Later in the day, New York Fed Chairman John C. Williams and Fed Governor Lael Brainard will make statements.