The probability of another 25bp UK base rate hike to 5.5%as early as this Thursday has lessened on the back of the 09:30GMT disclosure ofJanuary's sub-forecast UK service sector PMI. This fell to 59.2, from 60.6 in December. A more modest drop to 60.0 was expected. The pound was sold on the back of the disappointing number, with tripped stops below 1.9600 helping depress cable to a five-day low of 1.9564.
EUR/GBP ascendedthrough 0.6600 to a high of 0.6610. Stops are tipped above 0.6615.GBP/USD bear targets south of 1.9564 are touted at 1.9550, 1.9510 and 1.9483 (last Wednesday's 19-day low). 1.9590 and 1.9600 are now rebound resistance levels. Upper obstacles include 1.9628 (today's Asian session base), 1.9638 (last Friday's floor), 1.9668 (today's Asian session top) 1.9700, and 1.9750.
News-wise: the source of an outbreak of H5N1 bird flu at a Suffolk farm is beingsought as a cull of thousands of turkeys nears its end (BBC website). January's US ISM non-manufacturing index will be unveiled at 15:00GMT. Forecast:57.0, from 56.7 in December.
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