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28 Aug 2013
Flash: GBP/USD fails to break 200W MA ahead of Carney - BTMU
FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the pound continues to weaken modestly in the near-term after EUR/GBP failed to break below key support from its 200-week moving average which came in at just below the 0.8500-level, and GBP/USD failed to break above key resistance from its 200-week moving average which came in at around the 1.5750-level.
Key Quotes
“The pound is trading on weaker footing heading into today’s speech from BoE Governor Carney.”
“It is his first significant speech since he took over as Governor, and will provide the first opportunity to comment on developments since the BoE introduced forward rate guidance on the 8th August.”
“It is unlikely that Governor Carney will have been pleased that forward rate guidance, a form of easing, unintentionally prompted a tightening in overall monetary conditions in the UK with short rates rising and the pound strengthening, even accounting for the further pick up in cyclical economic momentum in the UK.”
“As a result it would be surprising if Governor Carney did not attempt to push back against those market expectations for earlier BoE tightening, to reinforce the potential effectiveness of the guidance.”
Key Quotes
“The pound is trading on weaker footing heading into today’s speech from BoE Governor Carney.”
“It is his first significant speech since he took over as Governor, and will provide the first opportunity to comment on developments since the BoE introduced forward rate guidance on the 8th August.”
“It is unlikely that Governor Carney will have been pleased that forward rate guidance, a form of easing, unintentionally prompted a tightening in overall monetary conditions in the UK with short rates rising and the pound strengthening, even accounting for the further pick up in cyclical economic momentum in the UK.”
“As a result it would be surprising if Governor Carney did not attempt to push back against those market expectations for earlier BoE tightening, to reinforce the potential effectiveness of the guidance.”