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COZfx: GBP/USD near 5-week lows on fresh Ukraine worries

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COZfx: GBP/USD near 5-week lows on fresh Ukraine worries

Postby dwang » Wed Mar 19, 2014 2:17 am

COZforex: The pound dropped to nearly 5 week lows against the US dollar on Tuesday, as markets were jittery following reports armed gunmen stormed a Ukrainian military base in Simferopol, although mixed US economic reports did little to support the greenback.

GBP/USD hit 1.6552 amid US morning trade, the pair's lowest since February 12; the pair subsequently consolidated at 1.6567, retreating 0.42%. COZFX strategist Nigel Boynton said, GBP/USD is predicted to find support at 1.6605, and a decline through could take it to the next support line of 1.6573. Meanwhile, the pair is predicted to find its first resistance at 1.6669, and a rise through could take it to the next resistance line of 1.6701.

The risk-related pound weakened after CNN reported that Vladislav Seleznyov, Ukraine's defense ministry spokesman, said at least one Ukrainian officer had been injured in an assault on a base by "armed people in masks" near the Crimean capital of Simferopol. Earlier Tuesday, Russian President Vladimir Putin said that Russia isn't seeking "a partition of Ukraine", signaling that Russia's moves in Ukraine would be limited.

The comments came during a speech to a joint session of parliament in Moscow, a day after the president recognized the results of Sunday's referendum in Crimea, which saw a majority of voters chose to split from Ukraine.

The European Union and the US have declared the vote illegal and imposed sanctions.
In the US, data showed that the annual rate of inflation slowed to 1.1% in February from 1.6% in January. Analysts had expected the annual inflation rate to drop to 1.2%.
Month-on-month, US consumer prices rise 0.1% in February, in line with forecasts.

Separately, the Commerce Department reported that the number of building permits issued in the US increase to a 4 month high in February, rebounding after a sharp drop in January.

The number of building permits issued last month jumped 7.7% to 1.018 million units following a 16.8% fall in January, as a result of severe winter weather.

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