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7 Feb 2013
Forex: EUR/GBP dampens on Carney's hawkish statement
Incoming BoE Governor Carney is testifying before UK lawmakers and has said that the central bank must exit unconventional policy. Investors are interpreting those words as pretty hawkish for the British Pound, sending it on a rally. As consequence, the EUR/GBP is falling sharply, by around 60 pips from 0.8660 to test the 0.8600 psychological level.
Earlier, UK Goods Trade deficit narrowed more than expected, to £-8.897B (from £-9.275B), as well as Total Trade deficit (at £-3.2B) and non-EU trade deficit (at £-4.23B).
UK Industrial Production improved from -2.4% to -1.7% in December, with a monthly rise by +1.1%. UK Manufacturing Production was also upbeat, at +1.6% (MoM), improving the annualized figure from -2.0% to -1.5%.
Commerzbank analysts are more in favor of a correction lower but are unable to rule out a move to 0.8800/30 (78.6% retracement of the move down from 2011 and the October 2011 high) prior to this being seen. “While above circa 0.8400 it will remain capable of further gains – failure to do so will neutralise the chart and initiate a deeper retracement to 0.8240/0.8165”, wrote analyst Karen Jones, regarding 0.8800/30 as the last defence for the 0.9082 2011 high.
Earlier, UK Goods Trade deficit narrowed more than expected, to £-8.897B (from £-9.275B), as well as Total Trade deficit (at £-3.2B) and non-EU trade deficit (at £-4.23B).
UK Industrial Production improved from -2.4% to -1.7% in December, with a monthly rise by +1.1%. UK Manufacturing Production was also upbeat, at +1.6% (MoM), improving the annualized figure from -2.0% to -1.5%.
Commerzbank analysts are more in favor of a correction lower but are unable to rule out a move to 0.8800/30 (78.6% retracement of the move down from 2011 and the October 2011 high) prior to this being seen. “While above circa 0.8400 it will remain capable of further gains – failure to do so will neutralise the chart and initiate a deeper retracement to 0.8240/0.8165”, wrote analyst Karen Jones, regarding 0.8800/30 as the last defence for the 0.9082 2011 high.