G10 in consolidation with better Chinese data adding a slight positive to risk
City Index January 10, 2012 1:00 PM
<p>GBP/USD Range: 1.5450 – 1.5485 Support: 1.5350 Resistance: 1.5550 Sterling has consolidated with a slight positive tone as we await the main event this week […]</p>
Range: 1.5450 – 1.5485
Sterling has consolidated with a slight positive tone as we await the main event this week in the form of the BoE meeting on Thursday. A large US investment house is calling for £50 billion to be added to QE although many in the market are expecting February or March as more likely dates for this to be announced as members assess the incoming data and the European debt crisis. There were positives overnight with the release of stronger BRC sales and RICS housing data.
There was little news from the Merkozy meeting yesterday, with the market taking the view that generally the can was being kicked a little further along the street with the pair confident that the new international agreement between the EU member states will be finalised in March. However, they also acknowledged the severe difficulties associated with the EU/IMF programme for Greece and raised doubts over the arrival of the next tranche of loans to the indebted country. The market seems very much in consolidation ahead of the ECB meeting on Thursday along with Spanish and Italian bond auctions on Thursday and Friday respectively, which are also a key focus this week.
AUD was the main mover overnight, making positive gains with robust data seen from Building Approvals and stronger Chinese data. China’s December trade surplus was almost double the forecast at $16.5 billion versus a forecast of $10.2 billion, with exports higher at 13.4% versus expectations of 12.9% and imports lower at 11.8% versus a consensus of 17.5%. AUD then received a further boost, pushing the pair above 1.0300 as November building approvals showed strong resilience bouncing back by 8.4% versus a forecast of 7%.