Market Update – GBP EUR
The pound has enjoyed a strong rebound over the last week, sparked by comments from BoE member Paul Fisher, pushing the prospect of further quantitative easing (“QE”) on to the back burner. The heat was further reduced after the minutes from the October BoE meeting were released on Wednesday, showing that all nine members of the committee voted to keep QE on hold. That gave the pound another boost, giving us a four cent improvement since last week’s low. BoE members were hung up on the idea that increasing QE could help to stoke higher inflation in 2010. This latest news has shifted the balance of the debate towards the possibility that the UK is now winding down the liquidity splurge as conditions gradually improve. UK Retail sales data for September were slightly lower than expected, but showed a 2.4% year on year increase, enough to keep sterling’s rally on the rails.
The technical outlook has improved considerably. We may well have a low in place, and from here we do expect a period of consolidation to set in soon, but ultimately the pound looks set to trade higher over the coming weeks. We would only become concerned again if the market returns to 1.0800 or below.
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analysts. Any analysis and/or forecasts provided are aimed at
helping clients understand market conditions and developing trends.
Clients are wholly responsible for their own trading
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Related posts:
- TorFX – US Dollar Update
- TorFX – Special Euro Update
- Euro Update – Sterling declined another 2 cents since last week’s special update
- Euro Update – Sterling started last week badly by breaking below the key 1.15 support
- Australian Dollar – Yet another tailwind for the Australian currency this week has been a strong rally in gold prices
