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Pound at a five and a half year high

Article By: ,  Financial Analyst
June 20, 2014 10:09 AM

The weak USD continues from the dovish FOMC announcement on Wednesday night, with the dollar gauge approaching a one-month low and the market seeming to be in a range-bound mood.

With little data out today to help any moves, we could be seeing a sell rally in the USD.

The pound is making more ground as it hits a five-and-a-half-year high overnight, pushed up by a weaker USD and anticipation that the BoE will raise rates this year, as opposed to 2015.  BoE’s McCafferty helped matters with his comments, stating that the interest rate rise will depend on the economy in the next months.

Today public sector net borrowing data is released, expected to come in at 11.8b from its previous reading of 9.6b. It is possible that this could slow down the move but the trend looks firmly in place for today.

The euro is still trending higher but we are having some very choppy moments due to concerns about the ECB’s actions and whether will they be enough. It seems the market is waiting for the ECB to eventually have to enter into QE to help stimulate the stale inflation they are currently battling. These thoughts are echoed by the IMF’s Lagarde who said that the euro’s recovery is not strong enough. She urged the ECB to act on QE if the rate cuts taken do not affect inflation.

Today’s data is the current account balance and the markets are expecting this to be at 19.4b, better than the previous reading of 18.8b.

 

EUR/USD

Supports 1.3600 1.3580 1.3500 | Resistance 1.3650 1.3675 1.3690

 

 

USD/JPY

Supports 101.62 100.75 100.00 | Resistance 102.15 102.35 102.85

 

 



GBP/USD

Supports 1.700 1.6970 1.6950 | Resistance 1.7065 1.7100 1.7140

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