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13 Nov 2014
Session Recap: A solid dollar and a weak Sterling
FXStreet (San Francisco) - The foreign exchange market saw a solid dollar that advanced against its major competitors, especially compared to a pound which negotiates under pressure following a pessimistic inflation report from the Bank of England.
In stocks, Wall Street took a breath on Wednesday after the Dow Jones and the S&P posted small losses after recovering from initial declines. WTI Oil fell on the day, while the gold moved sideways around 1162.
The GBP/USD closed the day at 1.5775, below the previous 14-month low of 1.5790. It means a clear bearish signal for the rest of the week. According to ANZ analysts Amber Rabinov & Brian Martin, "The BoE was unambiguously more dovish in its November Quarterly Inflation Report."
Including a downgrade in inflation forecast and a softening in the outlook of the GDP, "prospects for a H1 2015 rise in the bank rate have been reduced," ANZ analysts continue, "this is negative for sterling near term and will act as a constraint on GBP vs USD, AUD and NZD".
The EUR/USD lost half recovery of Tuesday as the pair was rejected by the level of 1.2500 before closing at 1.2435. According to FXStreet chief analyst Valeria Bednarik, the EUR/USD "will take a break below 1.2400 to confirm further declines, with sellers now expected to reappear on approaches to the 1.2500 price zone."
On the Japanese side, the USD/JPY tested the 116.00 level for a second day but the pair failed to break above it and got a rejection that sent it to 114.90. However, the pair managed to regain levels and closed at 115.50.
In stocks, Wall Street took a breath on Wednesday after the Dow Jones and the S&P posted small losses after recovering from initial declines. WTI Oil fell on the day, while the gold moved sideways around 1162.
The GBP/USD closed the day at 1.5775, below the previous 14-month low of 1.5790. It means a clear bearish signal for the rest of the week. According to ANZ analysts Amber Rabinov & Brian Martin, "The BoE was unambiguously more dovish in its November Quarterly Inflation Report."
Including a downgrade in inflation forecast and a softening in the outlook of the GDP, "prospects for a H1 2015 rise in the bank rate have been reduced," ANZ analysts continue, "this is negative for sterling near term and will act as a constraint on GBP vs USD, AUD and NZD".
The EUR/USD lost half recovery of Tuesday as the pair was rejected by the level of 1.2500 before closing at 1.2435. According to FXStreet chief analyst Valeria Bednarik, the EUR/USD "will take a break below 1.2400 to confirm further declines, with sellers now expected to reappear on approaches to the 1.2500 price zone."
On the Japanese side, the USD/JPY tested the 116.00 level for a second day but the pair failed to break above it and got a rejection that sent it to 114.90. However, the pair managed to regain levels and closed at 115.50.