Carney was supposed to be bearish for sterling. He was supposed to do some monetary magic that would weaken sterling to levels that would jumpstart industry in a stagnate British economy. There is just one problem with that. The story changed. When Carney accepted the position, the British economy was a very sad one. But that is not today’s scenario 6 months later. Numbers have been robust. Optimism is starting to creep in. Headlines are honestly hopeful. But let us not get too ahead of ourselves. The latter part of 2013 is yet to unfold. With sterling moves higher on yields (which are moving higher on growth), the question remains is if this growth is sustainable and repeatable. The uncertainty around this answer plays out as a grinding market for now. The moves are choppy but very well bid into some major resistance levels. ACROSS THE BOARD. $GBPAUD has seen 1.75; $GBPNZD targets 2.00; $GBPUSD has flirted with 1.5750; and $EURGBP remains supported by 0.85. The $GBPCAD weekly chart is unbelievable with price right at long-term resistance at 1.64. Incredible strength in sterling in the middle of August seems a little too good to be true. Wait for September.
- UK trade: One-way traffic (FT)
- FXStreet’s Live Analysis Room Interview with Lydia Idem Finkley (UStream)
- Bank of England rebel Martin Weale concerned by high inflation (City AM)
- Why I fear for Carney’s forward guidance plan (The Telegraph)
- Pound Continues To Push Higher As Carney Fails To Rein In Bond Market (Seeking Alpha)
- Carney rate pledge being tested already (CMC Markets)
- The Post-Carney Reality: Time To Buy GBP (eFXnews)
- FORWARD GUIDANCE: ‘THE MARKET REACTION IS DEFINITELY NOT WHAT THE BANK WAS LOOKING FOR AT ALL’ (Pieria)
- Ashraf Laidi on CNBC – August 15, 2013 (YouTube)
- MINUTES OF THE MONETARY POLICY COMMITTEE MEETING 31 JULY AND 1 AUGUST 2013 (Bank of England) [PDF]
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