GBP Trading Outlook
The Sterling (GBP) was dragged lower be the Euro slump but we have found support at 1.6050 on Cable. EUR/GBP fell below 0.8100 and has traded as low as 0.8070 so far in Asia. The outlook is mixed with bulls cautious given the new Euro developments and US NFP today. The BOE met and kept rates at 0.5% as widely forecast. Looking ahead, ECB President Draghi Speaks. Also German Industrial Output forecast at -0.5%m/m vs. -1.8% m/m/
The Sterling (GBP) remained at the 1.6100 level in very tight range which is unusual for the Pound which usually trades in a 100 pip+ daily range. The BOE meet tonight to discuss UK interest rates and are widely expected to keep rates at 0.5% and the asset purchase program at 375bn. Looking ahead, ECB Interest Rate Decision forecast to hold at 0.75%. BoE Interest Rate Decision forecast at 1.0% previously.
The Sterling (GBP) was contained to a 50 pip range around the 1.6100 level and was left behind by the EUR/USD rally. EUR/GBP has taken advantage of the recent underperformance of the GBP and is now approaching at 0.8150. Looking ahead, October Retail Sales forecast at -0.1% vs. -0.2% previously.
The Sterling (GBP) was strong advancing to 1.6100 tracking the Euro strength and reacting to better than forecast PMI manufacturing at 49.1 vs. 47.3 previously. GBP/JPY is finding resistance above Y132 but is still well supported on dips. Looking ahead, November UK Construction PMI forecast at 50.5 vs. 50.9 previously.
The Sterling (GBP) reversed from 1.6060 to tested 1.6000 during the US session on Friday with weak Canadian GDP and US income figures putting a dampener on the final session. Over the weekend we saw good Chinese data but US politicians seem no closer to a fiscal cliff compromise. Looking ahead, November EU PMI Manufacturing forecast at 46.2 vs. 46.2 previously.
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