GBPUSD Movement
For the 24 hours to 23:00 GMT, GBP fell 0.10% against the USD and closed at 1.6367.
Early yesterday, the British Pound came under pressure after the Bank of England (BoE) policy maker, Ian McCafferty implied that interest rates would not rise all of a sudden even if the unemployment rate falls to the BoE’s target of 7% next year. Furthermore, he denied that the central bank’s so-called forward guidance had underestimated the speed of the recovery and was at risk of failing to react to positive signs of growth, that some officials feared could fuel inflation next year.
However, the Pound gained ground after the Office for National Statistics revealed a rebound in UK retail sales, which increased 0.3% on a monthly basis in November, compared to a fall of 0.9% recorded in the preceding month.
In the Asian session, at GMT0400, the pair is trading at 1.6362, with the GBP trading tad lower from yesterday’s close.
This morning, the Bank of England (BoE), in its quarterly bulletin, indicated that it has become more cautious about predicting about the economy following an analysis of its predictions over the past few years. Furthermore, it cautioned that any rise in interest rates would hit indebted homeowners hard. Separately, the GfK Group reported that the consumer confidence in the UK dropped to a level of -13.0 in December, compared to a reading of -12.0 reported in the previous month. Markets had expected the UK GfK consumer confidence to improve to -11.0 in December.
The pair is expected to find support at 1.6335, and a fall through could take it to the next support level of 1.6307. The pair is expected to find its first resistance at 1.6391, and a rise through could take it to the next resistance level of 1.6419.
Going forward, the very crucial GDP data from the UK is expected to influence risk appetite for the British Pound.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
