Intra-Day Market Moving News and Views GBP/USD

Intra-Day Market Moving News and Views

GBP/USD -.... Cable languishes just above Asian fresh 4-month low of 1.6603 as intra-day resumption of MT downtrend in eur/usd dragged the pound below Tuesday's NY low at 1.6611. European traders may choose to keep their powder dry ahead of the release of last BoE MPC minutes at 08:30GMT to check if MPC member Martin Weale was the only dissenter in keeping the record low 0.5% rate unchanged.

Even though a 1 or even 2 dissenters may trigger minor short-covering rebound in cable, yesterday's surprise sharp drop in the U.K. inflation data has really put final nail in the coffin on prospect of a rate rise by the end of this year.

U.K. Telegraph reported economists say an interest rate rise in 2014 is "no longer in play". Price rises, as measured by the consumer prices index, eased to 1.6% in Jul, from 1.9% in Jun, as stores slashed prices in the summer sales n a supermarket price war pushed down food prices.

The unexpectedly steep decline, below an anticipated fall to 1.8%, will ease pressure on the BoE to raise rates in the short term. Inflation has now been at or below the Bank's 2% target for 8 months, n policymakers expect price rises to remain close to target for the next 3 years.

Average pay packets across Britain have also failed to keep pace with price rises. Total weekly earnings fell by 0.2% in the 3 months to Jun, compared with a year earlier, marking the first fall since 2009. Governor Carney said last week that policymakers would place more emphasis on the path of wage growth when deciding whether to raise rates. However he stressed that policymakers would not have to wait for strong pay growth before tightening policy.