Liquidation of long GBP positions ahead of the looming BoE MPC base rate verdict has been blamed for sterling's London morning slump to a six-day low of 1.9850. The MPC is expected to hike the UK base rate by 25bp to 5.5% at 11:00GMT. A brief statement of explanation will accompany.
Touted support points south of 1.9850 include 1.9840, 1.9825 and 1.9800. 1.9805, 1.9790 and 1.9775 option strikes roll off at today's 14:00GMT NY cut. GBP/USD resistance levels include 1.9890, 1.9900, 1.9929 (today's Asian session base), 1.9964 (today's early Europe high), 1.9975 and 2.0000 (yesterday's 8-day peak). 2.0000 and 2.0100 option strikes also expire today.
Tony Blair has arrived in his Sedgefield constituency where he will make public his plans to stand down as Labour leader and PM (BBC website). Chancellor Gordon Brown is expected to succeed Blair as PM in late June/early July.
UK industrial production was weaker-than-expected in March. The UK trade deficit also widened. The size of March's US trade deficit will be disclosed at 12:30GMT. Forecast: $60.0bn.
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