3 Dec 2013
GBP/USD consolidating above 1.6400
FXstreet.com (Edinburgh) - The sterling continues to recover from Monday’s pullback, taking the GBP/USD beyond the critical 1.6400 handle after better-than-expected UK construction PMI.
GBP/USD propped up by data
Recent positive results from manufacturing and construction PMIs confirmed the healthy recovery in the UK economy, adding to the GBP strength at the same time. The next relevant release in the British economy will be tomorrow’s key Services PMI ahead of the BoE MPC meeting on Thursday. Market consensus expects the indicator to ease a tad to 62.0 in November from 62.5, although any surprise to the upside would likely push the pair to challenge ytd highs just above 1.6440. Jane Foley, Senior Currency Strategist at Rabobank, commented, “, on the assumption that we do not expect the Federal Reserve to start tapering the size of its monthly asset purchases until March next year, the USD is likely to remain on the back foot and this is set to leave GBP/USD well supported going forward. We expect cable to remain close to current levels on a 1 to 6 mth view and then move back below the GBP/USD1.60 area as tapering takes hold. We see sterling as having the capacity to recover some ground vs. the EUR during 2014 as the ECB continues to emphasis its dovish policy position”.
GBP/USD levels to watch
At the moment the pair is up 0.33% at 1.6407 facing the next hurdle at 1.6443 (2013 high Dec.2) followed by 1.6455 (high Aug.29 2011) and finally 1.6500 (psychological level). On the flip side, a break below 1.6315 (low Nov.29) would aim for 1.6277 (low Nov.28) and then 1.6260 (high Oct.1).
GBP/USD propped up by data
Recent positive results from manufacturing and construction PMIs confirmed the healthy recovery in the UK economy, adding to the GBP strength at the same time. The next relevant release in the British economy will be tomorrow’s key Services PMI ahead of the BoE MPC meeting on Thursday. Market consensus expects the indicator to ease a tad to 62.0 in November from 62.5, although any surprise to the upside would likely push the pair to challenge ytd highs just above 1.6440. Jane Foley, Senior Currency Strategist at Rabobank, commented, “, on the assumption that we do not expect the Federal Reserve to start tapering the size of its monthly asset purchases until March next year, the USD is likely to remain on the back foot and this is set to leave GBP/USD well supported going forward. We expect cable to remain close to current levels on a 1 to 6 mth view and then move back below the GBP/USD1.60 area as tapering takes hold. We see sterling as having the capacity to recover some ground vs. the EUR during 2014 as the ECB continues to emphasis its dovish policy position”.
GBP/USD levels to watch
At the moment the pair is up 0.33% at 1.6407 facing the next hurdle at 1.6443 (2013 high Dec.2) followed by 1.6455 (high Aug.29 2011) and finally 1.6500 (psychological level). On the flip side, a break below 1.6315 (low Nov.29) would aim for 1.6277 (low Nov.28) and then 1.6260 (high Oct.1).