Closed in NY at $1.5841 after rate had seen a late NY sell off back to $1.5819 on reaction to BOE King’s speech, the market concentrating on headlines that the BOE stood ready to provide further stimulus and was open to a review of the current policy regime. However, a deeper read of King’s comments quickly had analysts highlighting the comment that is was now ‘sensible to review
arrangements ‘ for monetary policy but went on to argue in favour of key elements of the current flexible inflation targeting regime. The speech is expected to dampen effects of today’s BOE Minutes, with market to focus on PM Cameron’s speech this morning concerning the UK/EU relationship going forward, most of which has been picked up by the FT, as well as Friday’s key release of Q4 GDP data. The reactive dip in sterling saw euro-sterling move back to stg0.8415, from session lows of stg0.8364, with rate consolidating the recovery between stg0.8405/16 in Asia. Cable support remains around $1.5820, stronger toward $1.5800 (barrier interest), with resistance at $1.5845/50 ahead of $1.5880/85.
EasyForexNews Research Team