That is what seem so imminent on the cable GBPUSD, front at the moment. The announcement of further interest rates cut last week to 0.5% (a-315-year low) was the first sign of the Bank of England’s MPC willingness to start printing money. They made no secret about this except that they can’t really say if this bold step will work.
Cable Slides on Cut
As you would expect after Thursday’s surprise news today trading was the first indication that the market is losing faith in the pound sterling.
From the Pivot numbers above, it is evident that the negative market forces have not fully played out yet on cable. How long this last would depend on how well the gatekeepers of the pound sterling are willing to put a lead of their ‘bad smell’.
At the moment, we are trading the 1.3830. If this slide continues it won’t be surprising to see cable trading below 1.3000 in the near-term. Whilst this might be a great news for the Government and Treasury in their quest for toxic assets purchase, but the long-term effect is that it discourages savings and increase spending. In an economic cycle where unemployment is at record levels, it is getting harder to see the rationale behind this thinking as everyone holds on to what they’ve got.
Cable Slides on Cut
As you would expect after Thursday’s surprise news today trading was the first indication that the market is losing faith in the pound sterling.
From the Pivot numbers above, it is evident that the negative market forces have not fully played out yet on cable. How long this last would depend on how well the gatekeepers of the pound sterling are willing to put a lead of their ‘bad smell’.
At the moment, we are trading the 1.3830. If this slide continues it won’t be surprising to see cable trading below 1.3000 in the near-term. Whilst this might be a great news for the Government and Treasury in their quest for toxic assets purchase, but the long-term effect is that it discourages savings and increase spending. In an economic cycle where unemployment is at record levels, it is getting harder to see the rationale behind this thinking as everyone holds on to what they’ve got.
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