GBP Trading Outlook
The Sterling (GBP) the BOE held at 0.5% as widely expected and the GBP/USD flowed the Euro higher and then lower after the Draghi disappointment. EUR/GBP tested 0.8500 briefly at the height of the EUR/USD weakness but this level held and we saw a small bounce into the close. GBP/USD was able to hold above 1.5600 and will follow the Euro again today for movement. Looking ahead, October Trade Balance forecast at -9.4bn vs. -9.8bn previously.
The Sterling (GBP) rallied in the US session as EUR/GBP selling supported. The BOE also meet tonight but this is likely to be a nonevent holding at 0.5% and no new announcements are expected. Traders will be watching the ECB meeting closely and will likely follow the lead of the EUR/USD for direction today. Looking ahead, BOE Rate Meeting 0.5% hold and QE at 275bn unchanged.
The Sterling (GBP) underperformed the Euro as the market bought EUR/GBP which had been under pressure recently. The GBP/USD is struggling above 1.5600 but is very quiet as are most of the markets ahead of the EU summit and ECB/BOE meetings on Thursday. Halifax HPI fell -0.9% vs. 0.0% forecast m/m. Looking ahead, October Industrial Output forecast at -0.3% vs. 0% previously m/m.
The Sterling (GBP) did well rallying with the Euro early in the day and then not falling aggressively with the S&P news as the EUR/GBP fell instead. EUR/GBP is looking to test lower towards the key 0.8500 support as the debt crisis hurts the Euro more than its neighbor in the UK. Looking ahead, November Halifax HPI forecast at 0.0% vs. 1.2% m/m.
The Sterling (GBP) GBP/USD struggled more than most falling back to below 1.5600 by the end of the close on concern the BOE may increase the asset purchase program at this week’s rate meeting and the USD strength post NFP on Friday. Looking ahead, November PMI services forecast at 50.5 vs. 51.3 previously.
Go to The Sterling (GBP) Archive