The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Sterling eyes MPC votes
The pound has been edging higher ahead of the MPC voting breakdown at 9.30am (London time). Awaiting the announcement, the market is expecting all nine members to vote in favour of keeping rates on hold and for the stimulus package to be kept unchanged at $375 billion, which will prompt short-term buying.
The chances of the voting breakdown coming in different to the expectations are low, but if it were to be different the bias it’s leaning towards is a vote in favour of lowering the interest rate.
As I previously stated, the UK inflation rate is at zero, but if you round it off to two decimal places it is in contraction, and this is cause for concern as the UK is teetering on deflation.
GBP/USD is receiving support at the 100-hour moving average (MA) at $1.4925, and the resistance at $1.50 will be the first target. If that is cleared, last week’s high of $1.5048 will be the next target. A drop below the 100-hour MA will bring $1.49 into sight and then the next level of support will be the $1.4855 area.