Yesterday’s UK CPI was slightly weaker than expected, increasing the case for a cut in interest rates. Sterling duly sold off on the initial reaction, but this didn’t last, and one gets the feeling that the interest rate cut is now widely expected.
US manufacturing and industrial production was very much in line with expectations, producing a notable lack of reaction from the dollar.
This morning sees the release of UK employment data at 09:30, followed by EMU Industrial production at 10:00, and US CPI at 13:30. There is therefore potential for volatility across the major paris today.
GBP EUR – Support 1.4520/35 then 1.4500
Resistance 1.4600, 1.4615
GBP USD – Support 1.7600 then 1.7512
Resistance 1.7690/00 then 1.7725
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