GBP/USD News Analysis And Forecast For 8th June
Pound To Dollar Exchange Rate Update
The BOE brought no change to the key rate today as they followed in the footsteps of the ECB. The British pound gained strength following the announcement – taking out weak sterling shorts in the process. The BOE minutes, which will be released later in the month, will reveal how the respective members voted and give an insight into the decision making process. The UK FTSE 100 likewise gained today as equites rallied; the FTSE closed up almost 1% on the day and is over 3.5% higher on the weekly basis.
The market’s focus was on China today who announced an unexpected rate cut of 25 basis points and on Ben Bernanke who gave no clues regarding additional Fed stimulus measures during his testimony. There had been speculation that the Fed might extend its Operation Twist program or introduce another round of quantitative easing. This came after the Federal Reserve Bank of Atlanta’s President Dennis Lockhart advised that extension of Operation Twist, remains an “option on the table.”
Event risk on Friday 8th June includes PPI Input m/m from the UK and Wholesale Inventories m/m from the US along with trade balance data. There is also the Chinese Consumer Price Index (CPI) data from the National Bureau of Statistics which follows the first Chinese interest rate cut since 2008.
- The pound to dollar daily range for the 7th June is 170 pips which is 173% of the average daily range for GBPUSD
- GBP/USD is now trading just under the 1.5600 prior swing low after finding resistance at this level. Further to this is the 38.2% Fibonacci retrace around 1.5660.
- The 1.5500 psychological level is closely aligned with two daily highs and potential support after seeing resistance.