Pound Climbs On Risk Appetite
December 19 2014 - 5:06AM
RTTF2
The pound firmed against its major rivals in European deals on
Friday, as European markets extended gains on Federal Reserve's
pledge that it would be patient in raising rates and after a strong
German consumer sentiment survey.
In its policy statement released on Wednesday, the Fed indicated
that it is prepared to hike interest rates as scheduled, while
replacing its "considerable time" language with a new language that
the bank "can be patient" about the timing of the first rate
hike.
Markets cheered the Fed chairwoman Janet Yellen's comments, who
sounded an upbeat assessment of the economy, while signaling that
the rates would rise after the "next couple of meetings."
According to the survey by the market research group GfK, German
consumer confidence is set to improve to an eight-year high at the
start of the year on strong gains in economic expectations and
willingness-to-buy as the current economic weakness is expected to
be temporary.
The forward-looking consumer confidence index climbed to 9 for
January, the highest since December 2006, from 8.7 in December. The
index was forecast to rise marginally to 8.8 points.
In economic news, majority of the households in the U.K.
perceived that the value of their houses increased in December,
results of a survey by Knight Frank and Markit Economics
showed.
The house price sentiment index, or HPSI, rose to 59.1 in
December from 58.4 in November. This marked the twenty first
consecutive month of the index remaining above 50.
Strong retail sales data for November, positive jobless claims
data and the Fed's assurance to start tightening by mid-2015
supported the currency on Thursday.
The pound, which closed yesterday's trading at 1.5347 against
the franc and 186.16 against the yen, approached a 5-week high of
1.5377 and a 1-week high of 187.23, respectively. The next possible
resistance for the pound is seen around 1.55 against the franc and
190.00 versus the yen.
The pound strengthened to 0.7829 against the euro, its highest
since November 12. This may be compared to an early low of 0.7850.
Continuation of the pound's bullish trend may lead it to a
resistance around the 0.775 mark.
The pound reversed from an early low of 1.5649 against the
greenback and rose to a 2-day high of 1.5681. If the
pound-greenback pair extends rise, 1.58 is seen as its next
resistance level.
Looking ahead, at 10:00 am ET, Fed's Charles Evans will give
opening remarks in Chicago.
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