Pound Spikes Up Against Majors
April 12 2012 - 5:30AM
RTTF2
In early European deals on Thursday, the pound advanced against
other major currencies despite a report showed that the U.K. trade
deficit widened in February.
The UK's visible trade gap increased in February and exceeded
economists' expectations, data from the Office for National
Statistics showed.
The deficit on seasonally adjusted trade in goods was GBP 8.8
billion in February, compared with a revised GBP 7.9 billion
deficit in January. Economists expected a deficit of GBP 7.65
billion, higher than January's previously estimated shortfall of
GBP 7.53 billion.
The deficit on trade in goods and services was GBP 3.4 billion
in February, higher than GBP 2.5 billion in January. Expectations
were for a shortfall of GBP 2 billion.
Investors now await Italian bond auction results for signs of
stability in the euro zone.
The pound that closed yesterday's deals at 128.65 against the
yen and 1.5909 against the greenback reached a 2-day high of 129.38
and a 9-day high of 1.5958, respectively. The next upside target
level for the pound is seen at 130.00 against the yen and 1.60
against the greenback.
Bank of Japan Governor Masaaki Shirakawa today said that the
central bank will continue powerful monetary easing and warned that
uncertainty over global economy still remained high.
In a speech at a quarterly meeting of the central bank's
regional branch managers, Shirakawa said the BoJ will pursue
powerful easing to help the economy overcome deflation and return
to a sustainable growth path.
Against the euro and the franc, the pound approached a new
3-month high of 0.8229 and a fresh 4-week high of 1.4618 from
yesterday's close of 0.8243 and 1.4597, respectively. If the pound
gains further, it may target 0.815 against the euro and 1.47
against the franc.
Eurozone inflation is expected to stay above 2 percent in 2012,
with upside risks prevailing, the editorial to the European Central
Bank's monthly bulletin showed.
Over the policy-relevant horizon, the ECB forecasts price
developments to remain in line with price stability.
The U.S. PPI for March, trade data for February, weekly jobless
claims for the week ended April 7, Canada trade data and new
housing price index for February are expected in the New York
morning session.
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