News Column

Pound Strengthens Against Majors

August 12, 2014

BRUSSELS (Alliance News) - The pound advanced against its key counterparts in European deals on Tuesday, as traders await UK labour market data and Bank of England's inflation report, due tomorrow.

The UK claimant count is expected to have dropped by 30,000 in July, compared to the 36,300 fall recorded in June. ILO jobless rate for the three months through June is seen falling to 6.4% from 6.5% in May.

The inflation report will provide an outlook on BoE's interest rate policy. The market widely expect the first rate hike by February 2015, which has been kept unchanged at record low of 0.5% since 2007.

Meanwhile, UK like-for-like sales fell 0.3% on year in July, the British Retail Consortium said early in the day.

That was well shy of forecasts for an increase of 0.9% following the 0.8% contraction in June.

The pound rose back against the yen, reaching a 4-day high of 171.72 from an early low of 171.37. If the pound extends its rise, 172.5 is seen as its next possible resistance level. The pair ended Monday's deals at 171.50.

The pound hit a 4-day high of 1.5277 against the Swiss franc, off an early low of 1.5208. Next key resistance for the pound-franc pair may be seen around the 1.53 region. At yesterday's close, the pair was quoted at 1.5216.

The pound advanced to a 4-day high of 0.7945 against the euro, after having fallen to 0.7979 at 1:00 am ET. The pound is likely to target resistance around the 0.79 zone. The euro-pound pair was worth 0.7971 when it closed deals yesterday.

The pound recovered to 1.6784 against the US dollar, at where it ended yesterday's deals. This follows a 2-month decline of pound to 1.6756 a dollar in prior deals. The next resistance level for the pound is seen at the 1.69 region.

Looking ahead, US monthly budget statement for July is due at 2:00 pm ET.

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Source: Alliance News

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