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COZfx: UK’s April consumer prices accelerated more than mark

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COZfx: UK’s April consumer prices accelerated more than mark

Postby dwang » Thu May 22, 2014 2:38 am

COZforex: For the past trading session, the GBP rise 0.13% against the USD and closed at 1.6836 after data showed that UK consumer inflation rate rise for the first time in 10 months to an annual rate of 1.8% in April.

However, UK’s producer price index, retail price index and house price index failed to match market expectations for April. Meanwhile, UK Prime Minister, David Cameron agreed to the BoE’s view that the booming housing market posed a risk to the nation’s economic recovery and expressed his willingness to scale back his ‘Help to Buy’ mortgage guarantee scheme if the BoE felt it is contributing to a housing bubble.

Separately, the BoE Deputy Governor, Charlie Bean projected interest rates to gradually rise in the UK economy while indicating that the central bank would find it difficult to “exit from its exceptionally stimulatory monetary stance.” Furthermore, he acknowledged the perils of UK’s booming housing market and opined that an interest rate hike can be the only effective tool to cool the housing market.

In the Asian session, GBP/USD is trading at 1.6840, with the Pound trading a tad higher from yesterday’s close.

In technical analysis, COZforex senior currency strategist Ian • Quigley said, GBP/USD is predicted to find support at 1.6806, and a drop through could take it to the next support line of 1.6771. Meanwhile, the pair is predicted to find its first resistance at 1.6871, and a rise through could take it to the next resistance line of 1.6901.

Looking ahead, UK’s retail sales data and the minutes from the BoE’s latest policy meeting would be keenly eyed for further cues in the British Pound.

(COZ forex UK)
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