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27 Feb 2013
Forex: GBP/USD pares gains following mixed GDP data in UK
The GBP/USD has recently fallen into negative territory Wednesday on the heels of mixed economic data out of the United Kingdom. A recent upside attempt was stonewalled at 1.5137, and in recent minutes the pair has fallen nearly 30 pips to trade at 1.5106/10 presently.
Slobodan Drvenica, an analyst at Windsor Brokers Ltd. cites the next resistances at 1.5160, then 1.5192, and finally 1.5220. Conversely, a pullback into negative territory could portend the eventual testing of supports at 1.5080, ahead of 1.5069, and the 1.5000 barrier and psychological support.
In the United Kingdom, Gross Domestic Product (QoQ) has fallen -0.3% in the fourth quarter, in line with expectations calling for the same figure. In addition, Gross Domestic Product (YoY) has grown +0.3% in the fourth quarter, exceeding estimates that called for a stagnation. Finally, the Total Business Investment (YoY) has grown +0.4% in the fourth quarter, down fro +5.1% previously.
Yesterday, Deputy Governor Tucker floated the concept of negative interest rates, and said he hoped the idea would be looked into in more detail. Tucker went on to stress the importance of a "flexible" approach to interpreting the Bank's inflation-fighting mandate. Surprisingly he ventured that the Bank should not obsess about the CPI level on a two-year horizon and that it is the trend in inflation numbers that matters more. According to Research Analyst Gareth Berry at UBS, “We remain short GBP/USD as a trade recommendation and see considerable scope for further downside even without a broad-based dollar rally.”
Slobodan Drvenica, an analyst at Windsor Brokers Ltd. cites the next resistances at 1.5160, then 1.5192, and finally 1.5220. Conversely, a pullback into negative territory could portend the eventual testing of supports at 1.5080, ahead of 1.5069, and the 1.5000 barrier and psychological support.
In the United Kingdom, Gross Domestic Product (QoQ) has fallen -0.3% in the fourth quarter, in line with expectations calling for the same figure. In addition, Gross Domestic Product (YoY) has grown +0.3% in the fourth quarter, exceeding estimates that called for a stagnation. Finally, the Total Business Investment (YoY) has grown +0.4% in the fourth quarter, down fro +5.1% previously.
Yesterday, Deputy Governor Tucker floated the concept of negative interest rates, and said he hoped the idea would be looked into in more detail. Tucker went on to stress the importance of a "flexible" approach to interpreting the Bank's inflation-fighting mandate. Surprisingly he ventured that the Bank should not obsess about the CPI level on a two-year horizon and that it is the trend in inflation numbers that matters more. According to Research Analyst Gareth Berry at UBS, “We remain short GBP/USD as a trade recommendation and see considerable scope for further downside even without a broad-based dollar rally.”