Cable remains under pressure as markets await FOMC decision

The markets are taking their lead from the emerging markets sector, with Turkey and Argentina remaining under pressure and the situation further deteriorating in Ukraine.

The Nikkei, Hand Seng and Kopsi all had substantial losses following the worst close for the S&P on Friday for seven months.

Cable remains under pressure following comments from BoE Governor Mark Carney at the Economic forum in Davos.

Carney again played down the significance of the 7% unemployment threshold, saying that, “we will assess the overall conditions in the labour market (and) more broadly the supply capacity of the economy, just as we’ve said all along that we would do at that point, and set policy appropriately”.

The ECB President again reminded the markets that there was “an unwanted tightening of monetary conditions in the euro area”, with the Financial Times suggesting that the ECB may look to buy loans from banks to households and companies to fight the threat of deflation, which would signal an unconventional method of QE not seen before.

This week’s highlight will be the FOMC decision on Wednesday evening as we await the next reduction in asset purchases despite the weather distorted unemployment report.

We will also see GDP readings from the US and UK, with today’s data coming from Germany in the latest IFO reading.

The US will be revealing its latest new home sales data this afternoon.

EUR/USD

Supports 1.3650-1.3630-1.3570 | Resistance 1.3750-1.3780-1.3810


USD/JPY

Supports 102.00-101.75-101.00  | Resistance 102.80-103.10-103.85

GBP/USD

Supports 1.6475-1.6445-1.6400 | Resistance 1.6550-1.6630-1.6670