GBPUSD Movement
For the 24 hours to 23:00 GMT, GBP rose 0.29% against the USD and closed at 1.6250.
On the UK economic front, the DCLG house price index rose 1.5% (YoY) in October, slower than the 1.7% gain recorded in September. Meanwhile, inflation remained stable at 2.7% (YoY) in November, whereas, on a monthly basis, consumer prices increased at a slower pace of 0.2% in November. Moreover, retail price inflation slowed to 3.0% (YoY) in November, from 3.2% in October. In the output price inflation fell to 2.2% (YoY) in November, from a revised 2.6% recorded in the previous month. Meanwhile, on an annual basis, input prices fell 0.3% in November, after staying flat in October.
Separately, the Bank of England (BoE) in its quarterly bulletin stated that the Funding for Lending Scheme launched in August helped to reduce market funding costs for the UK banks. It further stated, “Early signs have been encouraging.” By reducing funding costs, it should lead to more and cheaper credit flowing into the real economy.
In the Asian session, at GMT0400, the pair is trading at 1.6261, with the GBP trading marginally higher from yesterday’s close.
The pair is expected to find support at 1.6215, and a fall through could take it to the next support level of 1.6168. The pair is expected to find its first resistance at 1.6289, and a rise through could take it to the next resistance level of 1.6316.
The release of the Bank of England minutes is likely to receive increased market attention in the day ahead.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
