Pound at a five-and-a-half-year high

<p>The weak USD continues from the dovish FOMC announcement on Wednesday night, with the dollar gauge approaching a one-month low and the market seeming to […]</p>

The weak USD continues from the dovish FOMC announcement on Wednesday night, with the dollar gauge approaching a one-month low and the market seeming to be in a range-bound mood.

With little data out today to help any moves, we could be seeing a sell rally in the USD.

The pound is making more ground as it hits a five-and-a-half-year high overnight, pushed up by a weaker USD and anticipation that the BoE will raise rates this year, as opposed to 2015.  BoE’s McCafferty helped matters with his comments, stating that the interest rate rise will depend on the economy in the next months.

Today public sector net borrowing data is released, expected to come in at 11.8b from its previous reading of 9.6b. It is possible that this could slow down the move but the trend looks firmly in place for today.

The euro is still trending higher but we are having some very choppy moments due to concerns about the ECB’s actions and whether will they be enough. It seems the market is waiting for the ECB to eventually have to enter into QE to help stimulate the stale inflation they are currently battling. These thoughts are echoed by the IMF’s Lagarde who said that the euro’s recovery is not strong enough. She urged the ECB to act on QE if the rate cuts taken do not affect inflation.

Today’s data is the current account balance and the markets are expecting this to be at 19.4b, better than the previous reading of 18.8b.

 

EUR/USD

Supports 1.3600 1.3580 1.3500 | Resistance 1.3650 1.3675 1.3690

 

 

USD/JPY

Supports 101.62 100.75 100.00 | Resistance 102.15 102.35 102.85

 

 



GBP/USD

Supports 1.700 1.6970 1.6950 | Resistance 1.7065 1.7100 1.7140

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.