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18 Oct 2013
GBP/USD continues to climb on US "notaper" and solid UK data
FXstreet.com (London) - Sterling continues to climb against the dollar, spurred on by consistently positive UK macro data and the prospect of continuing ultra-loose Federal Reserve monetary policy.
Sterling has climbed to two-week highs at USD1.6217, up 0.33 percent so far today.
UK retail figures released yesterday beat expectations to rise 0.6 percent. Figures released by the Office for National Statistics also showed that sales volumes had risen by 2.2 percent compared with September 2012.
Earlier in the week, UK jobless claims fell by the most in 16 years, despite unemployment rates holding steady. Speculation that the positive signs coming from the UK labour market could mean the Bank of England may bring forward rate hikes from their 2016 projection helped to support sterling. But the UK is a long way from Mark Carneys stated 7 percent level at which he would consider raising rates, and speculation at this point about an earlier hike could be wide of the mark.
In the US, the effects of the debt ceiling shutdown, and the short-termist nature of the eleventh hour compromise agreement that allowed the government to re-open has pushed expectations of any tapering of the Fed’s USD85bn-a-month asset purchase programme well into 2014.
After the Fed held back on tapering at its September meeting, there was speculation of a possible small October taper. But the debt ceiling has now been extended to 7 February, making any taper unlikely before March.
Sterling has climbed to two-week highs at USD1.6217, up 0.33 percent so far today.
UK retail figures released yesterday beat expectations to rise 0.6 percent. Figures released by the Office for National Statistics also showed that sales volumes had risen by 2.2 percent compared with September 2012.
Earlier in the week, UK jobless claims fell by the most in 16 years, despite unemployment rates holding steady. Speculation that the positive signs coming from the UK labour market could mean the Bank of England may bring forward rate hikes from their 2016 projection helped to support sterling. But the UK is a long way from Mark Carneys stated 7 percent level at which he would consider raising rates, and speculation at this point about an earlier hike could be wide of the mark.
In the US, the effects of the debt ceiling shutdown, and the short-termist nature of the eleventh hour compromise agreement that allowed the government to re-open has pushed expectations of any tapering of the Fed’s USD85bn-a-month asset purchase programme well into 2014.
After the Fed held back on tapering at its September meeting, there was speculation of a possible small October taper. But the debt ceiling has now been extended to 7 February, making any taper unlikely before March.