GBP/USD has posted sharp losses on Wednesday, as the pair trades slightly above the 1.59 line. The pound took a hit after the BoE Inflation Report cut its growth and inflation forecasts. Meanwhile, British Claimant Count Change missed expectations, while Average Earnings Index improved to 1.0%. In the US, there are no major releases on Wednesday. We’ll get a look at Unemployment Claims on Thursday.
The pound took a tumble on Wednesday, giving up over 100 points to the US dollar. The pound reacted sharply to the BoE Inflation report, which is released each quarter. The report said that inflation is unlikely to hit the 2% target before 2017, and could drop below 1% in the next six months. The BoE blamed low inflation on weak commodity prices and a slowdown in the global economy. The Bank maintained its growth forecast for 2014 at 3.5%, but lowered the 2015 forecast from 3.1% to 2.9%. Meanwhile, Claimant Count Change fell by 20.4 thousand, but this was short of the estimate of a decline of 24.9 thousand. The unemployment rate remained steady at 6.0%, missing the estimate of 5.9%.
GBP/USD for Wednesday, November 12, 2014
GBP/USD November 12 at 16:40 GMT
GBP/USD 1.5816 H: 1.5941 L: 1.5801
- GBP/USD was flat in the Asian session. The pair posted sharp losses in the European session, breaking below support at 1.5864. The pair has steadied in North American trade.
- 1.5717 is providing strong support.
- 1.5864 has reverted to a resistance role as the pound sustained sharp losses.
- Current range: 1.5717 to 1.5864
Further levels in both directions:
- Below: 1.5717, 1.5644, 1.5505 and 1.5392
- Above: 1.5864, 1.6000, 1.6141, 1.6263 and 1.638
OANDA’s Open Positions Ratio
GBP/USD ratio is pointing to gains in short positions on Wednesday, reversing the direction we saw a day earlier. This is consistent with the pair’s movement, as the dollar has posted sharp gains. The ratio is pointing to a majority of long positions, indicative of trader bias towards the pound reversing direction and moving higher.
- 8:00 US FOMC Member Charles Plosser Speaks.
- 9:30 British Average Earnings Index. Estimate 0.9%. Actual 1.0%.
- 9:30 British Claimant Count Change. Estimate -24.9K. Actual-20.4K
- 9:30 British Unemployment Rate. Estimate 6.0%. Actual 5.9%.
- 10:00 British CB Leading Index. Actual -0.4%.
- 10:30 BoE Governor Mark Carney Speaks.
- 10:30 BoE Inflation Report.
- 15:00 US Wholesale Inventories. Estimate 0.3%.
- 17:00 US FOMC Member Narayana Kocherlakota Speaks.
- 18:01 US 10-year Bond Auction.
* Key releases are highlighted in bold
*All release times are GMT
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.