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13 Sep 2013
Flash: GBP/USD could see setback ahead of Fed – Investec
FXstreet.com (Lisbon) - Jonathan Pryor, Corporate Treasurer at Investec outlines the upcoming set of events and potential for GBP/USD movement.
Key quotes
“Mark Carney’s testimony to the Treasury select committee threw up a few surprises yesterday. He sought to defend his policy on forward guidance on rates after sharp rises in long term borrowing rates by warning that unemployment may fall at a slower rate than many forecasters expect.”
“He also brought inflation to the forefront of the BoE agenda vowing to be tougher on inflation and to do a better job of forecasting future price rises. Carney reiterated that he is prepared to raise interest rates to combat inflation arising above target. Carney however failed to dampen market expectations as gilt yields remained close to recent highs throughout the afternoon and sterling traded around the 1.5800 and 1.1900 level against the Dollar and Euro respectively.”
“Ahead of next Wednesday’s FOMC announcement where news on whether the Fed opts to taper its QE3 purchases will be made known, we have US retail sales and Michigan consumer sentiment data released this afternoon. With all eyes geared to next week, market reaction may be muted but in light of last week’s disappointing Nonfarm payrolls release, the USD could benefit from an upside surprise.”
Key quotes
“Mark Carney’s testimony to the Treasury select committee threw up a few surprises yesterday. He sought to defend his policy on forward guidance on rates after sharp rises in long term borrowing rates by warning that unemployment may fall at a slower rate than many forecasters expect.”
“He also brought inflation to the forefront of the BoE agenda vowing to be tougher on inflation and to do a better job of forecasting future price rises. Carney reiterated that he is prepared to raise interest rates to combat inflation arising above target. Carney however failed to dampen market expectations as gilt yields remained close to recent highs throughout the afternoon and sterling traded around the 1.5800 and 1.1900 level against the Dollar and Euro respectively.”
“Ahead of next Wednesday’s FOMC announcement where news on whether the Fed opts to taper its QE3 purchases will be made known, we have US retail sales and Michigan consumer sentiment data released this afternoon. With all eyes geared to next week, market reaction may be muted but in light of last week’s disappointing Nonfarm payrolls release, the USD could benefit from an upside surprise.”