RTTN:Pound Slides Against Majors; Market Eying Tomorrow's BoE
(RTTNews) - The pound edged lower against its major rivals in early deals on Wednesday as investors reduced holdings in high-yielding currencies on lingering eurozone debt concern. Market is waiting for the Bank of England rate decision that is due out tomorrow for further direction.
The Greek political deadlock continued to haunt the market as the debt-embattled nation could reject its existing bailout plan that saved it from a chaotic bankruptcy and exit the European Union.
Eurozone worries intensified last night after Alexis Tsipras, the left-wing politician who has the mandate to form a government, said he expected Antonis Samaras of New Democracy party and Evangelos Venizelos, the former finance minister who leads the Pasok party, to send a letter to the European Union revoking pledges to austerity measures.
The Bank of England policymakers are unlikely to announce further quantitative easing on Thursday as they seem to think that the monetary policy has already provided enough stimulus. The decision could be weighed down by sticky inflation rather than the fact that the economy slipped back into a double-dip recession.
The nine member committee is expected to leave the size of the quantitative easing unchanged at GBP 325 billion. The interest rate is also seen unchanged at a historic low of 0.50 percent. The rate has been maintained at the current level since March 2009.
In economic news, retail sales in the UK declined in April as wet weather damped consumer spending, a survey by the British Retail Consortium (BRC) showed today. Retail sales values were down 3.3 percent on a like-for-like basis from April 2011, when they were up 5.2 percent, BRC said. On a total basis, sales fell 1 percent, against a 6.9 percent increase last year.
The pound reached a 2-week low against the dollar, hitting near the key 1.61 level around 5:40 am ET. The cable has been steadily falling since it advanced above the 1.63 level in the tail-end of April. The pound-dollar pair is presently worth 1.6115 with 1.6080 seen as the next likely support level.
Against the yen, the British currency reached more than a 3-week low of 128.27 and is now targeting support below the key 128.0 level. Further support levels for the pound-yen pair below the pivotal 128.0 are seen at 127.60 and 127.15.
Japan's leading indicator of economic activity improved for a third consecutive month in March, but remained below economists' forecast, preliminary data published by the Cabinet Office revealed today.
The index rose to 96.6 in March from 96 in February. Economists had forecast the reading to rise to 96.9. The coincident index, that measures the current economic activity, also improved during the month with the score rising to 96.5 from 95.2 in February.
(RTTNews) - The pound that rose above the 1.4950 against the Swiss franc after a gap of a day pulled back to below yesterday's closing quote of 1.4928 to reach as low as 1.4909. Similarly, the pound that tested Monday's new multi-year high of 0.8038 against the euro in the Asian session retreated to below yesterday's closing value of 0.8051.
