GBP/AUD: it’s just not cricket!
City Index January 24, 2014 3:27 PM
<p>The AUD once again took centre stage in the FX space overnight as the Wall Street Journal ran an interview with RBA external board member, […]</p>
The AUD once again took centre stage in the FX space overnight as the Wall Street Journal ran an interview with RBA external board member, Heather Ridout, where she commented that the AUD had not fallen enough and that the 0.8000 level “would be a fair deal for everybody”. She also added that Australia remained a high-cost economy and that growth was a concern.
The euro finally broke out of the 1.35/1.36 range – triggered by a slight improvement in the PMI data across the EU with the January highs of 1.3700/20 seen as the initial resistance area; while a close above could signal a re-test of the 1.3880 peak.
Cable remains the focus: breaking above the year high of 1.6605, which now targets levels not seen since 2011 at 1.6745.
Comments from Davos overnight have all but confirmed that the 7% unemployment threshold the BoE set is to be revised with a new forward guidance.
The general tone from Governor Mark Carney and BoE Martin Weale is that they have acknowledged upside changes in the UK economic outlook since the guidance was initiated, with Carney telling the BBC, “the case for a rate rise would be examined in next month’s inflation report but that it was important to look at the whole labour market, not just one indicator”.
A quiet day ahead of us with little key data. The only release will be the Canadian inflation data.
The highlight today will no doubt be BoE Governor, Mark Carney, addressing the conference in Davos – scheduled to start just after midday.
Supports 1.3655-1.3630-1.3600 | Resistance 1.3725-1.3780-1.3800
Supports 102.80-102.30-101.75 | Resistance 103.60-103.90-104.40
Supports 1.6605-1.6550-1.6500 | Resistance 1.6690-1.6710-1.6745
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