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6 Aug 2015
GBP/USD downside exposed on BoE before Nonfarm Payrolls
FXStreet (Guatemala) - GBP/USD is currently trading at 1.5513 with a high of 1.5638 and a low of 1.5466.
GBP/USD has a good deal of potential left of downside risk on the back of today's, not so "Super Thursday," for the pound. The expectations leading in to the meeting and inflation report was highly bullish and the hawks were circling, although let down massively from a more dovish outcome while the strength of the pound is undoubtably creating downside pressure on the inflation, and that the timing of a rate hike with be data dependant while energy prices bear down on inflation until mid 2016.
Only one BoE official voted in favour of the bank starting to raise interest rates this month, in contrast to expectations in a Reuters poll that two would do so. Those who have been expecting a rate hike as early this year had no choice but to run for cover.
In the event of poorer performances in the UK data, the pound will be subject to downside pressures. Brian Martin, analyst at ANZ explained, post the BoE today, for sterling, therefore, the backdrop is one of solid growth, low inflation and, finally, some recovery in wage inflation and productivity growth. "In our opinion, cable holds the biggest downside risk near term."
To the downside, Karen Jones, chief analyst at Commerzbank explained that a fall through the recent 1.5467 low would put the 200 day moving average at 1.5386 as well as the July trough at 1.5330 back on the map.
Next up, Nonfarm Payrolls. The ADP jobs report came out below the psychological 200k mark at 185k vs 215k. This puts the Nonfarm Payrolls in the ball park of around 215k vs a consensus of 225k.
Register to the live coverage and trade the NonFarm Payrolls with Bednarik, Pinkert and Elam. We are Forex!
GBP/USD has a good deal of potential left of downside risk on the back of today's, not so "Super Thursday," for the pound. The expectations leading in to the meeting and inflation report was highly bullish and the hawks were circling, although let down massively from a more dovish outcome while the strength of the pound is undoubtably creating downside pressure on the inflation, and that the timing of a rate hike with be data dependant while energy prices bear down on inflation until mid 2016.
Only one BoE official voted in favour of the bank starting to raise interest rates this month, in contrast to expectations in a Reuters poll that two would do so. Those who have been expecting a rate hike as early this year had no choice but to run for cover.
In the event of poorer performances in the UK data, the pound will be subject to downside pressures. Brian Martin, analyst at ANZ explained, post the BoE today, for sterling, therefore, the backdrop is one of solid growth, low inflation and, finally, some recovery in wage inflation and productivity growth. "In our opinion, cable holds the biggest downside risk near term."
To the downside, Karen Jones, chief analyst at Commerzbank explained that a fall through the recent 1.5467 low would put the 200 day moving average at 1.5386 as well as the July trough at 1.5330 back on the map.
Next up, Nonfarm Payrolls. The ADP jobs report came out below the psychological 200k mark at 185k vs 215k. This puts the Nonfarm Payrolls in the ball park of around 215k vs a consensus of 225k.
Register to the live coverage and trade the NonFarm Payrolls with Bednarik, Pinkert and Elam. We are Forex!