15 Oct 2013
GBP/USD Sterling slides on US debt ceiling resolution hopes
FXstreet.com (London) - Sterling continues to slide against the dollar as congress inches closer to a deal to temporarily extend the debt ceiling. Optimism has helped support the dollar just two days ahead of the 17 October debt ceiling limit.
Sterling was given a temporary lift this morning when UK inflation figures came in higher than expected. The data helped reduce the already slim likelihood of the Bank of England increasing its quantitative easing programme past the current GBP375bn.
Numbers released by the Office for National Statistics showed annual CPI running at 2.7 percent in September, unchanged from August. The figure was a slight rise on 2.6 percent consensus expectations.
While the news was sterling positive, the UK has seen consistently strengthening macro data, meaning further QE was already highly unwarranted. Instead, markets are more fixed on unemployment numbers, and the 7 percent threshold that Mark Carney has stated as the threshold for consideration of a BoE rate hike.
With markets focussed on the US debt ceiling, the biggest potential driver in GBP/USD comes from events in Washington, DC. Should party leaders arrive at a compromise agreement that would allow for a temporary extension of the debt ceiling, GBP/USD would come under heavy pressure from a dollar relief rally.
GBP/USD currently stands at USD1.5922, down 0.37 percent.
Sterling was given a temporary lift this morning when UK inflation figures came in higher than expected. The data helped reduce the already slim likelihood of the Bank of England increasing its quantitative easing programme past the current GBP375bn.
Numbers released by the Office for National Statistics showed annual CPI running at 2.7 percent in September, unchanged from August. The figure was a slight rise on 2.6 percent consensus expectations.
While the news was sterling positive, the UK has seen consistently strengthening macro data, meaning further QE was already highly unwarranted. Instead, markets are more fixed on unemployment numbers, and the 7 percent threshold that Mark Carney has stated as the threshold for consideration of a BoE rate hike.
With markets focussed on the US debt ceiling, the biggest potential driver in GBP/USD comes from events in Washington, DC. Should party leaders arrive at a compromise agreement that would allow for a temporary extension of the debt ceiling, GBP/USD would come under heavy pressure from a dollar relief rally.
GBP/USD currently stands at USD1.5922, down 0.37 percent.