GBPUSD Movement
For the 24 hours to 23:00 GMT, the GBP rose 0.17% against the USD and closed at 1.6989. The US dollar declined after the Fed slashed its growth-outlook on the US economy for 2014 and the Fed Chief, Janet Yellen, played down speculation for an early interest rate hike in the world’s largest economy.
Meanwhile, the GBP advanced as the minutes from the BoE’s June policy meeting hinted towards the possibility for the central bank to raise its interest rates before the end of this year, if its finds that the economy was well able to cope with higher borrowing costs. Furthermore, the minutes also revealed that all Monetary Policy Committee members voted unanimously to keep the BoE’s benchmark interest rate at a 0.5% and the size of its bond-purchase programme at £375 billion while highlighting policymakers’ surprise to low expectations for an interest rate hike in 2014 by some financial market participants. During his speech at Belfast, Northern Ireland, a BoE official, Martin Weale hinted that interest rates in the UK economy would rise sooner rather than later if the central bank sticks to its policy of raising its borrowing costs at a gradual and limited pace. Separately, another BoE policymaker, Andrew Haldane, citing UK’s strong economic growth and falling jobless rate, highlighted expectations for first interest-rate hike in the Britain economy will take place by the end of 2014, compared to an earlier expectation for interest rates to rise by the third quarter of 2015.
In the Asian session, at GMT0300, the pair is trading at 1.6995, with the GBP trading slightly higher from yesterday’s close.
The pair is expected to find support at 1.6942, and a fall through could take it to the next support level of 1.6888. The pair is expected to find its first resistance at 1.7027, and a rise through could take it to the next resistance level of 1.7058.
Market participants keenly await the release of UK’s May retail sales data for further cues in the British Pound.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
