Where is Sterling Pound Heading after 10 Jan 2008 Interest Rate announcement?

Posted on January 11, 2008
Filed Under Forex News |

Since the beginning of 2008, sterling pound had been expected to fall with the expectation of a rate cut. In fact, Interest Rate is one of the most important movers of a currency. You can look at my previous article about interest rate here.

This expectation of an interest rate cut had been gaining momentum due to a weakening UK economy especially from the housing and retail sectors. Yesterday, both Europe and UK made their respective Interest Rate announcements. The rate cut didn’t materialize though many had expected such a move. European Central Bank (ECB) kept interest rate unchanged at 4.00% and Sterling Pound remained at 5.50%.

Though Interest Rate cut didn’t happen, Sterling Pound still fell on multiple crosses. It seems to me that Pound is under pressure and just wondering how far it will goes down.

At the moment, I find something very interesting about the Pound. I realized that Pound (GBP) is finding temporary support on GBPUSD and GBPJPY. GBPUSD is at 1.9550 and GBPJPY is at 213.50.

gbpjpy-daily-11-jan-2008.jpg

gbpusd-daily-11-jan-2008.jpg

Look at these daily charts to understand better - Top chart is GBPUSD Daily, Below is GBPJPY. With the current Pound weak outlooks, I will not be surprised that these support levels will be broken. Once the support levels are penetrated, it will not come as surprise that these 2 GBP crosses will fall like yesterday GBPCHF. GBPCHF fell about 300 pips once the key support level was broken.

Cheers, Kampai, Proscht^^!!

Comments

3 Responses to “Where is Sterling Pound Heading after 10 Jan 2008 Interest Rate announcement?”

  1. john on January 11th, 2008 8:43 am

    Fully agree with you. I think Pound should be falling fast after breaking the weak support level.

  2. fxman on January 11th, 2008 8:44 am

    Cable is definitely going down….

  3. Sure Win on January 11th, 2008 3:09 pm

    You’re right on GBPJPY.

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