The British Pound fell to a low of 1.5857 against the greenback, with the RSI slipping into oversold territory, and the currency may continue to trend lower over the remainder of the week as price action breaks below the narrow range carried over from the previous week.Talking Points
• Japanese Yen: Modestly Lower Across the Board
• Pound: U.K. Pledges to Support Economic Recovery
• Euro: Private Sector Loans Weaken for Third Month
• US Dollar: Chicago Purchasing Manager Index on Tap
British Pound Breaks Out of Narrow Range, Euro Remains Little Changed
The British Pound fell to a low of 1.5857 against the greenback, with the RSI slipping into oversold territory, and the currency may continue to trend lower over the remainder of the week as price action breaks below the narrow range carried over from the previous week. Nevertheless, the drop in market liquidity is likely to produce difficult trading conditions, and we may continue to see choppy price going into the U.S. trade as investors go off-line ahead of New Years Day.
Meanwhile, U.K. Prime Minister Gordon Brown said that the government’s efforts to lower the budget deficit must be “sensible” and “fair” as the economic recovery remains “fragile,” and pledged to “reduce the deficit at a responsible pace, without choking off the recovery or damaging the frontline services the mainstream majority rely on.” As policy makers maintain the expansion in monetary and fiscal policy to encourage a sustainable recovery, the Bank of England is widely anticipated to hold the benchmark interest rate at the record-low of 0.50% in an effort to balance the risks for growth and inflation, and may look to extend its emergency program as the global financial system remains vulnerable to future shocks.
The Euro slipped to a low of 1.4306 during the Asian trade, but regained its footing during the European session to remain little changed from the previous day, and the single-currency may continue to trend sideways going into the following week as market liquidity slumps ahead of the new year. Meanwhile, the economic docket showed M3 money growth in the Euro-Zone unexpectedly fell 0.2% in November after expanding 0.3% during the previous, while the 3-month average increased 0.6% amid expectations for a 0.6% rise. The breakdown of the report showed private sector loans slumped at an annual pace of 0.7% to mark the third consecutive decline, and conditions may get worse over the following year as households face a weakening labor market paired with tightening credit standards.
U.S. dollar price action was mixed across the board, with the USD/JPY tipping higher for the third day to reach a fresh monthly high of 92.28, and the reserve currency could face increased volatility going into the North American trade as equity futures foreshadow a lower open for the U.S. market. At the same time, economic activity in the world’s largest economy is expected to expand at a slower pace in December as economists forecast the Chicago PMI to weaken to 55.1 from 56.1 in the previous month however; conditions are likely to improve throughout the following year as policy makers aim to encourage a sustainable recovery.
• Japanese Yen: Modestly Lower Across the Board
• Pound: U.K. Pledges to Support Economic Recovery
• Euro: Private Sector Loans Weaken for Third Month
• US Dollar: Chicago Purchasing Manager Index on Tap
British Pound Breaks Out of Narrow Range, Euro Remains Little Changed
The British Pound fell to a low of 1.5857 against the greenback, with the RSI slipping into oversold territory, and the currency may continue to trend lower over the remainder of the week as price action breaks below the narrow range carried over from the previous week. Nevertheless, the drop in market liquidity is likely to produce difficult trading conditions, and we may continue to see choppy price going into the U.S. trade as investors go off-line ahead of New Years Day.
Meanwhile, U.K. Prime Minister Gordon Brown said that the government’s efforts to lower the budget deficit must be “sensible” and “fair” as the economic recovery remains “fragile,” and pledged to “reduce the deficit at a responsible pace, without choking off the recovery or damaging the frontline services the mainstream majority rely on.” As policy makers maintain the expansion in monetary and fiscal policy to encourage a sustainable recovery, the Bank of England is widely anticipated to hold the benchmark interest rate at the record-low of 0.50% in an effort to balance the risks for growth and inflation, and may look to extend its emergency program as the global financial system remains vulnerable to future shocks.
The Euro slipped to a low of 1.4306 during the Asian trade, but regained its footing during the European session to remain little changed from the previous day, and the single-currency may continue to trend sideways going into the following week as market liquidity slumps ahead of the new year. Meanwhile, the economic docket showed M3 money growth in the Euro-Zone unexpectedly fell 0.2% in November after expanding 0.3% during the previous, while the 3-month average increased 0.6% amid expectations for a 0.6% rise. The breakdown of the report showed private sector loans slumped at an annual pace of 0.7% to mark the third consecutive decline, and conditions may get worse over the following year as households face a weakening labor market paired with tightening credit standards.
U.S. dollar price action was mixed across the board, with the USD/JPY tipping higher for the third day to reach a fresh monthly high of 92.28, and the reserve currency could face increased volatility going into the North American trade as equity futures foreshadow a lower open for the U.S. market. At the same time, economic activity in the world’s largest economy is expected to expand at a slower pace in December as economists forecast the Chicago PMI to weaken to 55.1 from 56.1 in the previous month however; conditions are likely to improve throughout the following year as policy makers aim to encourage a sustainable recovery.
From the Dailyfx.com
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