As you know, the MPC vote from the December meeting is released at 09:30. If any of the nine member panel voted for a rate cut, it would be taken a firm indication of a possible cut early in the New Year, a negative for sterling.
We also have US GDP at 13:30, bound to cause some volatility in the dollar. Expectations for growth range from 4.1% to 4.5%.
From Reuters:
Interest rates in the United States and the euro zone are set to rise twice during 2006, as the Fed’ brings its rate cycle to an end and the European Central Bank tightens cautiously for fear of choking the economy.
In Japan, rate hikes — when they eventually start — will probably come in even smaller steps. There are signs that the Bank of Japan’s ultra-loose monetary policy has finally paid off in the shape of better growth and, perhaps as early as the current quarter, an end to deflation.
The first step would be for the BOJ to end its policy of flooding the banking system with cash. Rate hikes may then follow, but only very cautiously — the median in the survey showed the overnight call rate edging up only very marginally by the end of 2006 to 0.10 percent.
GBPEUR – Support 1.4720 then 1.4660
Resistance 1.4800/15 then 1.4875
GBPUSD – Support 1.7520 then 1.7500, 1.7455
Resistance 1.7600 then 1.7685 – 17700
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