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Sterling stable around 1.5550 level

Friday, Dec 26 2014

Sterling remains within consolidation range that we have been in in the past few weeks. However, general outlook is more on the bearish side at the moment. GDP growth should slow in the fourth quarter, and there are deflation risks since CPI increased only by 1% in November. However, holiday season will spur sales that should contribute to economic growth. It is quite uncertain when BoE will raise its interest rates. At the moment we cannot expect that this will happen before the third quarter of 2015.

USD continues to gain on its value supported by recent US data which indicates stability and constant raise in labour market, while GDP for the third quarter showed 5% growth, much above forecasted incline. This also points out that Fed could be raising interest rates soon, perhaps even in the first quarter of 2015, though Fed officials are still not hinting at any particular date.

 

Sterling is stable around 1.5550 level in a tighter-range European part of the session, with UK banks being closed in observance of Boxing Day holiday. US session should also be a steadier one as there will be no data releases. Pair is likely to find support around 1.5530 level and resistance above 1.5580 area.

More in this category: « Aussie almost unchanged in a quite Friday's trade Euro lower amid Boxing Day trading »

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