17 Dec 2014
GBP/USD contained ahead of 1.58 and trade heavy
FXStreet (Guatemala) - Camilla Sutton, CFA, CMT, Chief FX Strategist at Scotiabank noted that GBP> is soft, down on a broadly stronger USD and a disappointing employment release.
Key Quotes:
"A disappointing employment release that saw only 115k job gains 3m/3m (the consensus had been for 137k) and a tick higher in the unemployment rate to 6.0%”.
“The BoE minutes provided few surprises, with the voting pattern unchanged, concerns over inflation and lack of wage growth and highlighting that lower oil prices are a net positive for the U.K."
"However the real weight for GBP was yesterday’s low inflation release, which saw headline fall to 1.0%y/y and core to 1.2%y/y, which has pushed out the expectations for an interest rate hike in the UK”.
“The combination of a softening in the economic data, the building expectation that the BoE will lag the Fed substantially and a broadly stronger USD are likely to weigh on GBP further over the coming months."
"GBP/USD short‐term technicals: mixed—technicals are not unified and instead suggest a conflicted range bound environment. Over the last month GBP has traded in a generally contained 1.5542 to 1.5826 range, currently trading just above the mid-point. We see this range as providing strong support and resistance levels."
Key Quotes:
"A disappointing employment release that saw only 115k job gains 3m/3m (the consensus had been for 137k) and a tick higher in the unemployment rate to 6.0%”.
“The BoE minutes provided few surprises, with the voting pattern unchanged, concerns over inflation and lack of wage growth and highlighting that lower oil prices are a net positive for the U.K."
"However the real weight for GBP was yesterday’s low inflation release, which saw headline fall to 1.0%y/y and core to 1.2%y/y, which has pushed out the expectations for an interest rate hike in the UK”.
“The combination of a softening in the economic data, the building expectation that the BoE will lag the Fed substantially and a broadly stronger USD are likely to weigh on GBP further over the coming months."
"GBP/USD short‐term technicals: mixed—technicals are not unified and instead suggest a conflicted range bound environment. Over the last month GBP has traded in a generally contained 1.5542 to 1.5826 range, currently trading just above the mid-point. We see this range as providing strong support and resistance levels."