Weekly Currency Update GBP/USD - Week ending 15th October
Oct 21st 2010, 10:13 am
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Weekly Currency Update GBP/USD - Week ending 15th October
An old saying on the trading floor is that on the third test it goes and this looks to be the case in GBP/USD as Sterling broke through the 1.60 barrier last week having tested the level for the third time.
The focus for this week therefore, with the announcement of the spending cuts aside, is whether we can now see consolidation above this 1.60 level.
In terms of the economic data the outlook for Q3 is looking ‘not so bad’ despite the much publicised slowing in the momentum of this recovery and GDP should come in at about 0.6%.
Last week we saw inflation remain stubbornly at 3.1%, the trade balance improved to a deficit of £8.2bn from £8.7bn and the key employment report unveiled the unemployment rate dropping to 7.7% reflecting the rise in employment.
In the US last week Bernanke made it very clear that fighting the possibility of deflation was their number one priority and raised the likelihood of further quantitative easing by saying ‘low inflation, high unemployment mean there would appear to be a case for further Fed action.’
This was orchestrated as the latest inflation data was released with CPI dropping to 1.1%, lower than market expectations
GBP/USD movement – High’s & Low’s of last week (11th October– 15th October)
High’s: 1.6109
Low's: 1.5755
A movement of 2.25%
Difference on £200,000
High: 322,180
Low: 315,100
Difference of: 7,080
Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.
Regards
Mark Bodega
Director - HiFX
The focus for this week therefore, with the announcement of the spending cuts aside, is whether we can now see consolidation above this 1.60 level.
In terms of the economic data the outlook for Q3 is looking ‘not so bad’ despite the much publicised slowing in the momentum of this recovery and GDP should come in at about 0.6%.
Last week we saw inflation remain stubbornly at 3.1%, the trade balance improved to a deficit of £8.2bn from £8.7bn and the key employment report unveiled the unemployment rate dropping to 7.7% reflecting the rise in employment.
In the US last week Bernanke made it very clear that fighting the possibility of deflation was their number one priority and raised the likelihood of further quantitative easing by saying ‘low inflation, high unemployment mean there would appear to be a case for further Fed action.’
This was orchestrated as the latest inflation data was released with CPI dropping to 1.1%, lower than market expectations
GBP/USD movement – High’s & Low’s of last week (11th October– 15th October)
High’s: 1.6109
Low's: 1.5755
A movement of 2.25%
Difference on £200,000
High: 322,180
Low: 315,100
Difference of: 7,080
Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.
Regards
Mark Bodega
Director - HiFX
