The not so proud pound makes a fresh low
City Index March 7, 2013 1:35 PM
<p>Cable made fresh lows of 1.4965 in the early Asian session trading to lows not seen since July 2010 on a report in the Financial […]</p>
Cable made fresh lows of 1.4965 in the early Asian session trading to lows not seen since July 2010 on a report in the Financial Times that has suggested that UK Chancellor Osborne will announce at the post budget speech on March 20th that under incoming BOE Governor Mark Carney the monetary policy will become more flexible with the article suggesting the MPC will have longer periods to get inflation below the 2% target allowing the old lady to adapt a FED style policy targeting employment and inflation. Today’s BOE meeting is now of high importance as although the committee seems split on a rate cut the bar for an additional £25 billion of QE seems a realistic possibility following outgoing King’s vote last month. I would be cautious selling sterling on such an announcement as this action could well be already priced in to the not so proud pound and could be possibly seen as a positive.
In other news the BOJ was a non event with outgoing BOJ Governor Shirakawa making his last appearance as he hands over to the new guard next month. Rating agency S&P revised up their rating on Portugal from negative to stable with the single currency seeing a very small bounce as we await the all important ECB press conference from President Draghi where the market seems unanimous that the ECB will keep policy unchanged with all eyes on the press conference for any mention of the Italian political situation although this will probably come in the Q&A session. The market for me has already fully priced in a further downgrade to Eurozone growth.
The data releases today include German factory orders with the weekly jobless claims data from the US along with trade data from both Canada and the US.
Supports 1.2960-1.2880-1.2740 | Resistance 1.3070-1.3150-1.3200
Supports 93.75-93.50-92.75 | Resistance 94.45-94.75-95.00
Supports 1.4945-1.4880-1.4820 | Resistance 1.5015-1.5050-1.5090
StoneX Financial Ltd (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.