Wednesday, April 18, 2012

GBPUSD Nearing 1.6000 Following UK Data

A slew of UK economic  reports were just released and a rise of demand in the GBPUSD as it has rallied from its morning lows.  BoE MPC Minutes showed that the central bank will keep interest rates steady at 0.5%, but more importantly, voting was 8-1 to leave its QE program at 325 billion pounds.  The Minutes also showed that the BoE worrying about a risk of CPI growth. Overall, With the vote decidingly against raising its QE amount, and mentions of rising inflation, Forex traders were taking the news as indication that the BoE won’t be expanding its QE program anytime soon.

Simultaneously released with the MPC Minutes were UK employment figures.  The Claimant Change number was better than expected with the Unemployment rate dropping to 8.3% from 8.4%.  The encouraging jobs data added further reason for Forex traders that the BoE was done with its QE program.

On the news, the GBPUSD has spiked to a high of 1.5992 from its morning lows of 1.5895 to trade at a two week high.  After successfully bouncing off of its 1.5800 support level earlier in the week, the question now is whether the current momentum will be enough to trigger an upside breakout if 1.6000 is broken.

No comments:

Post a Comment