The pound is continuing to suffer on the back of January's very poor UK retail sales figures, which have cast doubt on the BoE inflation report's suggestion that another 25bp UK rate hike is in the pipeline. GBP/USD fell by more than half-a-cent to two-day lows just shy of 1.9475 in early European trade, with EUR/GBP ascending to a new six-week peak just shy of 0.6740, amid good size German name selling of the pound.
Sterling support points south of 1.9475 include 1.9455/60, 1.9420, and 1.9400. A UK clearer was a good size buyer of GBP/USD from 1.9460 on Wednesday. 1.9500 (former prop) is now a resistance level. Upper obstacles include 1.9515 (yesterday's low), 1.9535 (today's Asian session top), and 1.9550.
News-wise: UK wage settlements rose to an eight-year high of 3.5% in the three months through January, according to a report for IRS (Bloomberg). US January PPI is due at 13:30GMT, alongside housing starts and building permits. Core PPI forecast: +0.2% m/m. February's preliminary Michigan Sentiment survey ensues at 15:00GMT. Forecast: 96.5.
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