7 Aug 2013
GBP/USD holds above 1.5300 handle
FXstreet.com (Barcelona) - GBP/USD is holding above the 1.5300 handle in the opening hours of the European markets.
Research teams at The Bank of Tokyo-Mitsubishi UFJ, Ltd said “The key focus today will be the release of the BoE’s Quarterly Inflation Report alongside which the government requested the BoE to assess the merits of forward rate guidance. It is highly likely that the BoE will adopt a form of forward rate guidance today which will be explained by Governor Carney at his first press conference. The exact form of guidance remains highly uncertain. Following their policy meeting on the 7th July, the MPC clearly expressed that they were unhappy with higher UK short rates, with the market bringing forward the timing of the first rate hike from the 2H 2016, which had been incorporated into their last QIR projections. Since their last QIR, real GDP growth was broadly in line with expectations in Q2 and inflation proved weaker. Still with the UK economy appearing to be gaining further upward momentum in Q3, the BoE may modestly raise its real GDP forecasts today. Inflation is still likely seen falling back to their 2.0% target in around two years. With the Fed likely to begin tapering QE soon potentially lifting US rates, the BoE will need to unveil a strong and credible forward rate commitment to successfully dampen UK short rates. A commitment to keep rates low until 2H 2015 or 2016 would help to keep short rates low and the pound weak in the year ahead. Alternatively a commitment to keep rates low until a threshold is reached such as the unemployment rate at 7.0% would roughly equate to a similar time frame. If the BoE disappoints those expectations, the pound is poised to strengthen and will weaken further if the commitment is more aggressive”.
GBP/USD consolidated
GBP/USD remains consolidated and the 20 dma is 1.5249, the 50 dma 1.5318, and the 200 dma is 1.5542. RSI (9) reads 57.23. Supports are ascending from 1.5243, 1.5254, 1.5281 and spot is 1.5316. Resistances are 1.5331, 1.5392, 1.5416, 1.5435 and 1.5480
Research teams at The Bank of Tokyo-Mitsubishi UFJ, Ltd said “The key focus today will be the release of the BoE’s Quarterly Inflation Report alongside which the government requested the BoE to assess the merits of forward rate guidance. It is highly likely that the BoE will adopt a form of forward rate guidance today which will be explained by Governor Carney at his first press conference. The exact form of guidance remains highly uncertain. Following their policy meeting on the 7th July, the MPC clearly expressed that they were unhappy with higher UK short rates, with the market bringing forward the timing of the first rate hike from the 2H 2016, which had been incorporated into their last QIR projections. Since their last QIR, real GDP growth was broadly in line with expectations in Q2 and inflation proved weaker. Still with the UK economy appearing to be gaining further upward momentum in Q3, the BoE may modestly raise its real GDP forecasts today. Inflation is still likely seen falling back to their 2.0% target in around two years. With the Fed likely to begin tapering QE soon potentially lifting US rates, the BoE will need to unveil a strong and credible forward rate commitment to successfully dampen UK short rates. A commitment to keep rates low until 2H 2015 or 2016 would help to keep short rates low and the pound weak in the year ahead. Alternatively a commitment to keep rates low until a threshold is reached such as the unemployment rate at 7.0% would roughly equate to a similar time frame. If the BoE disappoints those expectations, the pound is poised to strengthen and will weaken further if the commitment is more aggressive”.
GBP/USD consolidated
GBP/USD remains consolidated and the 20 dma is 1.5249, the 50 dma 1.5318, and the 200 dma is 1.5542. RSI (9) reads 57.23. Supports are ascending from 1.5243, 1.5254, 1.5281 and spot is 1.5316. Resistances are 1.5331, 1.5392, 1.5416, 1.5435 and 1.5480