House price inflation falls
Sterling gained versus a generally weaker dollar Friday as traders continued to mull the previous sessions stronger than expected UK retail sales data. Numbers released Thursday revealed retail sales jumped 0.8% in January, reversing the previous months 0.4% decline and trumping expectations for a 0.3% recovery. Experts reckon the data means the Bank of England may not be as aggressive with its rate cutting programme as previously hoped, although another reduction is expected in the spring.
Today, sterling is low versus the Dollar as house price inflation data has fallen to a 22 month low to 1.4%. There is a limited amount of data out in the UK this week but what is available could be important in setting the tone in the run up to the MPC meeting in March. The data is likely to focus on the UK housing market and in particular Februarys Hometrack and Nationwide price survey.
GBP/USD support level is 1.9360
GBP/USD resistance is 1.9695
There were gains for the Euro, although these were pared on news that Euro zone industrial orders fell 3.6% in December from the previous month and rose 2.1% year-on-year. Trichet is scheduled to speak on two occasions this week and the markets will be closely watching to see if there is any softening in his tone.
GBP/EUR support level is 1.3197
GBP/EUR resistance is 1.3285
Data released 25th February
US 15:00 existing homesales
Posted at: 13:10
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