British Pound Speculative Positioning Points Toward Rebound.Summary: The British pound failed in its early-morning test of 1.8700 as UK housing data continues to disappoint. Indeed, Rightmove home prices fell 4.8 percent... The British pound failed in its early-morning test of 1.8700 as UK housing data continues to disappoint. Indeed, Rightmove home prices fell 4.8 percent in August from a year earlier, marking the sharpest decline since record-keeping began in 2002.Property values in the UK have been falling rather steadily throughout the year, as the start of the credit crunch Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers. in 2007 triggered an increase in mortgage rates and more stringent lending standards. Much like the US, the decline in UK home prices is impacting financial institutions, as assets related to mortgages rapidly fall in value. This is much of the reason why Bank of England Bank of England, central bank and note-issuing institution of Great Britain. Popularly known as the Old Lady of Threadneedle Street, its main office stands on the street of that name in London. Monetary Policy Committee members like David Blanchflower continue to vote for rate cuts, but with consumer prices accelerating faster by the month, the MPC (1) (Mobile PC) A handheld or laptop computer. See handheld computer, laptop computer and Ultra-Mobile PC. (2) (MultiPath Channel) See multipath. will be hesitant to ignore their mandate to maintain price stability. As a result, the BOE BOE Based on Experience BOE Board of Education BOE BoletÃn Oficial del Estado (Spanish) BOE Bank of England BOE Board of Equalization BOE Board of Elections BOE Barrel of Oil Equivalent BOE Bind on Equip is unlikely to cut rates before year-end. How will this impact the British pound? Well, at this point, the currency is simply oversold Oversold In technical analysis, it is a market in which the volume of selling that has occurred is greater than the fundamentals justify. Notes: It is the opposite of overbought. . Looking at the most recent COT positioning report, the British pound index is at a bearish extreme, indicating potential for a GBP/USD low to form. Consequently, while we could continue to see the pair consolidate above Friday's lows of 1.8512, GBP/USD is due for a rebound toward 1.8900. A[umlaut umlaut (  m`lout) [Ger.,=transformed sound], in inflection, variation of vowels of the type of English man to men. ] 2008 Al Bawaba (Albawaba.com)
Provided by Syndigate.info an Albawaba.com company |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion