- The British pound cuts Wednesday’s losses and is trading near its highs for the week.
- Market sentiment is bullish, benefiting high beta currencies such as the British pound, the Australian dollar and the kiwi.
- Initial US jobless claims fell more than expected, adding to ADP’s positive job change report.
The GBP/USD It is picking up some of Wednesday’s losses, rising 0.32%, close to the highs for the week, trading at 1.3626 during the American session at the time of writing.
Positive market sentiment surrounds the market, as witnessed by the European and US equity markets, increasing between 1.46% and 2.09%. Furthermore, risk-sensitive currencies such as the pound, the aussie and the kiwi are making headway. The solution to the US debt ceiling, albeit short-term, brought relief to investors. Furthermore, Russia’s offer to ease Europe’s energy crisis sums up the optimistic tone.
Meanwhile, the US dollar index, which tracks the dollar’s performance against a basket of six pairs, is down 0.14%, standing at 94.10.
Unemployment claims in the US fell more than expected, QE reduction could be on the way
In the UK, Halifax house prices for September rose slightly, more than the previous reading. On an annual basis, it increased by 7.4%, higher than the expected 4.9%, while on a monthly basis it rose to 1.7%, more than the estimated 0.8%.
Across the pond, reading reports related to the second out of three jobs was better than expected. Initial jobless claims in the United States rose to 326,000 below the 348,000 predicted by analysts. According to the report, “The advance number for seasonally adjusted insured unemployment for the week ending September 25 was 2,714,000, a decrease of 97,000 from the revised level of the previous week.”
That said, the US job market appears to be improving with two out of three positive reports. On Friday, the US economic docket will feature the Non-Farm Payrolls report. Economists expect the creation of 488,000 new jobs in the economy. If the result comes in line or better than expected, investors could expect a bond reduction announcement at the November FOMC meeting.
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