CN: Sterling continues on bearish mode against dollar
Sterling continued its weakness against the dollar on Friday as investors were rushing to dump positions and cut losses and report from The U.K.'s Office for National Statistics .
The U.K.'s Office for National Statistics said that real GDP was down .5% in the third quarter, much weaker than expected and the slowest quarter of growth in nearly 18 years. From a year ago, real GDP was up .3%.
Bank of England Governor Mervyn King comments also influenced the investors sentiments .According to him Britain's economy is probably entering its first recession in 16 years. Sterling tumble as investors dump positions as risk aversion selling and worries about Britain's economic outlook as economists predict a prolonged downturn. Weakness in banking and housing sector also influenced the trader’s sentiments. Expectation of interest rate cut in near term future also added pressure.
According to the report from U.K.'s Office for National Statistics, the federal government posted a budget deficit of 37.59 billion pounds in the first half of 2008-2009, the largest for this time of year since records began in 1946.At the same time UK property website Rightmove reports a 1% m/m rise in asking prices for homes in England and Wales in Oct, but base effects still carry the annual rate down to -4.9% from -3.3% y/y in Sep.
Last day in spot trading, sterling closed at 1.5923(1.6321) against the dollar, after trading in the range 1.6315– 1.5265.
Weekly Outlook (DGBP:December)
Expected to trade within the range of 164.55-15274, breaking of either a side will make the direction. Resistances are 160.80, 163.10, 166.80 and 168.90. Supports are 155.88, 149.60 and 147.07.
Last day DGBP (dec.) traded in the range 160.70- 152.75 and closed at 158.85.
TECHNICAL OUTLOOK (Intra-day)
DGBP (Dec) - Bullish above $ 158.05; bearish below $ 157.55
DATA TO WATCH
2008 Oct 27
Mon
Oct 27
All Day
NZD
