GBPUSD Fell as BOE Cuts Forecast For Wage Growth

by on August 13, 2014 11:01 am BST

GBPUSD fell to a two-month low after the BOE cut its forecast for wage growth and said increases in interest rates will be gradual.

GBPUSD dropped 0.5 percent to $1.6734 and touched $1.6727 at 09:37 AM GMT, the least since June 5.
GBPEUR weakened 0.4 percent to 79.86 pence.

Pound dropped against all 16 of its major counterparts. While central bank Governor Mark Carney said in a June speech at Mansion House that the BOE may raise its key interest rate from a record earlier than investors expected, he since softened that stance. Last month he said that any increases in interest rates will be determined by the data. A report today showed wages fell for the first time since 2009.

“The market will be using the Inflation Report to second-guess the timing and extent of U.K. rate hikes,” Lee McDarby, executive director of U.K. corporate foreign-exchange sales at Nomura International Plc in London, said before the data were published. “Since his Mansion House speech, Carney may be quite conscious of the power of his hawkishness. We are seeing this come through now as he makes references to not wanting to rock the boat of U.K. recovery.”

GBPUSD Pivot Levels Pivot Woodie Fibonacci
Resistance 3 1.6886 1.6892 1.6851
Resistance 2 1.6851 1.6854 1.6828
Resistance 1 1.6827 1.6833 1.6814
Pivot 1.6792 1.6795 1.6792
Support 1 1.6769 1.6775 1.677
Support 2 1.6734 1.6737 1.6756
Support 3 1.671 1.6716 1.6734