Intra-Day Market Moving News and Views GBP/USD

Intra-Day Market Moving News and Views

24 Oct 2014 05:00GMT

GBP/USD - ...... Cable fell yesterday to a near 1-week low after U.K. retail sales showed continued slowdown consumer spending & industrial orders, damping expectation on timing of the BoE's rate hike in 2015.

Britain's brisk economic recovery is showing more signs of cooling after shoppers bought less, exporters took a hit fm Europe's slump and banks approved the fewest mortgages in more than a year.
Data released on Thursday underscored why the BoE is signalling that it is in no rush to raise interest rates, even as U.K.'s economic growth continues to outpace that of most other industrialised nations.

Earlier, BoE deputy governor Ben Broadbent had said that any future rise in interest rates was likely to be gradual, and that underlying interest rates - which dictate investment returns n BoE policy - would stay low for some time.
In a third set of figures, factory export orders in the 3 months to Oct fell to their lowest level since the start of last year as Europe's slowdown took its toll on British manufacturers.

Today's prelim. Q3 GDP data are expected to show growth cooled in the 3 months to Sep to a quarterly 0.7% fm 0.9% in the Apr-Jun period. A further slowdown is possible in the final 3 months of the year.
The recovery in Britain's economy has pushed the unemployment rate down to 6%. But pay is still lagging behind inflation, a reflection in part of how many people have found work in low-paying industries.

A survey published on Thursday showed the biggest fall in 4 years in one measure of consumer confidence as many of those workers feared they could lose their jobs as the economy cools off.

This morning, although cable recovered in tandem with euro in Euroepan trading on Thursday and rose to 1.6052 in NY morning after early intra-day sell off to 1.5995 after downbeat U.K. retail sales reports, price retreated to 1.6021 near NY close and then moved narrowly in Asia.
Looks like range trading above yesterday's low at 1.5995 would continue in Asia as traders are keeping their powder dry ahead of the release of important U.K. preliminary estimate for Q3 GDP at 08:30GMT.
According to consensus forecast, UK GDP growth in third quarter is expected to have slowed down to an annual rate of 0.7% fm 0.9% in previous quarter due to the significant deceleration in the euro zone, which had been driven down by the geopolitical crisis in Ukraine.
Therefore, despite Thur's rebound fm 1.5995, selling cable on recovery is still the favorable strategy.