The pound waits for the BoE inflation report

<p>Today’s volatility will most likely come from the inflation report hearings from the Bank of England’s Governor Carney. These can be long meetings, normally 1 […]</p>

Today’s volatility will most likely come from the inflation report hearings from the Bank of England’s Governor Carney. These can be long meetings, normally 1 – 2 hours of talking to the treasury committee, so a lot to listen out for especially parts on currency market, rate hikes and growth.  Expected to make a mark in the GBP, dependent on how they see the economy going forward, any signs that a hike in interest rates is not on the table could keep the pressure back on the pound.  Currently trading weak against the USD just below the 1.5700 level.

USD/JPY is having a very choppy week after falls from seven-year highs, it seems to not be able to gain above the 118 level.  BoJ’s Kuroda was speaking last night and reiterates the stance on beating deflation and is ready to do more if needed, he also comments that he is unfazed by the yen falls.  Currently USD/JPY is on the 118 level, falling below after Kuroda’s comments as we start to see some profit-taking and a possible overdone drop in the yen for the time being.

The Aussie and Kiwi have extended their falls overnight as USD starts to regain control. This morning the RBA deputy Governor Lowe will be speaking and this can cause some volatility for the AUD. The RBA generally likes to point out the very high AUD exchange rate and could pile on more pressure.  Currently trading just below the 0.8600 level.

The euro has been fighting back after its fall on Friday from Draghi’s dovish outlook but is back under pressure today from the USD.  Currently trading just above 1.2400, with no data out today in the Eurozone to help support it, it will come under pressure from US data out today.  Preliminary GDP from the US is set to be released at an expected 3.3% from 3.5%, a slight drop here as expected might weaken the dollar run. But an expected rise in consumer confidence up to 95.9 from a previous 94.5 could keep USD on its bull run.

 

EUR/USD

Supports 1.2390 1.2350 1.2330  | Resistance 1.2460-1.2510-1.2575

USD/JPY

Supports 117.90 117.40 117.10Resistance 118.80 119.10 119.65

 



GBP/USD

Supports 1.5645 1.5595 1.5560  Resistance 1.5730 1.5765 1.5820

 

 

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.