GBP/USD Daily Forecast

Friday, Jan 08 2016

Friday brought UK Trade Balance data. The UK’s deficit on trade in goods and services was estimated to have been £3.2 billion in November 2015, a narrowing of £0.3 billion from October 2015. The narrowing is attributed to trade in goods where the deficit has narrowed from £11.2 billion in October 2015, to £10.6 billion in November 2015. This was in line with market forecasts. Between October 2015 and November 2015, the trade in goods narrowing was mainly the result of a fall in the import of goods of £0.9 billion to £33.9 billion. The narrowing is mainly attributed to a fall in imports of oil which decreased by £0.5 billion to £2.2 billion.

Focus of the US session was on NFP figures. Total nonfarm payroll employment increased by 292,000 in December. Analysts were anticipating smaller incline by 203,000. Employment rose in several industries, including professional and business services, construction, health care, and food services and drinking places. Mining employment continued to decline. In 2015, payroll employment growth totaled 2.7 million, compared with 3.1 million in 2014. The number of unemployed persons, at 7.9 million, was essentially unchanged in December, and the unemployment rate was 5.0 percent for the third month in a row. This was in line with market forecasts. Over the past 12 months, the unemployment rate and the number of unemployed persons were down by 0.6 percentage point and 800,000, respectively.

There will be no data releases both from UK and USA on Monday, and after huge decline last week, Sterling could consolidate a bit in a less volatile session and ahead of Tuesday's Industrial Production figures.

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