If central banks allow gold to become money, how would they enact QE??
A choppy week has given away to sterling strength with $GBPUSD breaking above the major psychological level at 1.60. Traders say month end flows are to blame for sterling strength when its fundamentals hold a more ominous outlook for the currency. BoE next week will continue these breakouts and trigger some profit-taking as most pairs sit GBP bullish at key levels into the weekend …despite the headlines.
Sterling manages to stage a decent correction in today’s trading session. Yet, it is the AUD taking it on the chin today as it suffers from a double whammy of commodities weakness and USD strength. It was the only currency pair that sterling rallied higher against without much pullback. The timing with now confirmed Chinese softness (causing the commodities weakness) gives the $GBPAUD legs to run higher.
Sterling refuses to weaken even as economic data slips and members of the BoE still look to add more QE. The $GBPUSD continues to make higher highs at 1.5999 though still remains capped by the major 1.60 level. Even the almighty commodity dollars (AUD, NZD, and CAD) are weak against the GBP. Are we seeing the beginnings of a bear trend reversal in sterling?
This week rounds out the major central bank announcements for the month of March. Three central banks are on tap to release decisions on monetary policy: the Bank of Japan, the Federal Reserve, and the Swiss National Bank. Of course, the Fed is the highlight. But with the Fed in the news so much last week, one has to wonder what more the Fed can give the markets.
Very muted price action this trading session leaves sterling still weak after yesterday’s pullbacks. The market has entered its wait-and-see mode as we await the RBNZ later tonight and BoE, ECB, and BoC on Thursday morning. As boring as today may be, it gets just as interesting in the next 24 hours.
Sterling is strong across the board this morning. Despite less-than-expected UK Services PMI, sterling has managed to catch a bid versus many of the major currency pairs this trading session. The only exception at the moment is the $EURGBP, as euro strength battles sterling strength making for a very small range in the pair today.
$GBPUSD finally reached the major psychological level of 1.60 this week with the high at 1.5992. $GBPJPY breached its major psychological level of 130.00 with its high of 130.11 this week. However, both pairs finished the week with a healthy pullback as sterling weakened versus most of the majors on Friday. The $EURGBP was an exception as that pair probed new lows on the week at 0.8314 on across-the-board euro weakness.