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22 Jan 2015
GBP/USD pressing on the 1.51 handle, caught out on EZ malaise
FXStreet (Guatemala) - GBP/USD is currently trading at 1.5098 with a high of1.5215 and a low of 1.5093 and down 0.22% on the day.
GBP/USD has been offered on the developments in the Eurozone, as the UK relys on the business in the EZ and while the bloc nations struggle, this will weigh on the UK's own recovery. For the pound alone, analysts are beginning to back track away from the idea of a rate hike from the BoE this year, while all 9 members of the board just this week agreed to remain on hold with there being too many risk factors to the UK economy's growth.
Earlier today, the ECB confirmed its concerns for the EZ by introducing sovereign QE that will commence in March and at a scale larger than what had been expected. The ECB will be buying sovereign debt that markets have entitled as the Big Bazooka strategy. This will be to a scale of 60b EUR's monthly until September 2016 to battle against deflationary pressures, last seen down to 0.6% in Dec and well below ECB's target of close to 2%, and the prospects of such pressures damaging growth as businesses and consumers tighten their purse strings waiting for prices to continue to fall which in turn plays havoc on prices of goods, wages and ultimately growth and GDP results.As a result of the ECB's meeting, EUR/GBP is 0.94% currently at 0.7585.
GBP/USD has been offered on the developments in the Eurozone, as the UK relys on the business in the EZ and while the bloc nations struggle, this will weigh on the UK's own recovery. For the pound alone, analysts are beginning to back track away from the idea of a rate hike from the BoE this year, while all 9 members of the board just this week agreed to remain on hold with there being too many risk factors to the UK economy's growth.
Earlier today, the ECB confirmed its concerns for the EZ by introducing sovereign QE that will commence in March and at a scale larger than what had been expected. The ECB will be buying sovereign debt that markets have entitled as the Big Bazooka strategy. This will be to a scale of 60b EUR's monthly until September 2016 to battle against deflationary pressures, last seen down to 0.6% in Dec and well below ECB's target of close to 2%, and the prospects of such pressures damaging growth as businesses and consumers tighten their purse strings waiting for prices to continue to fall which in turn plays havoc on prices of goods, wages and ultimately growth and GDP results.As a result of the ECB's meeting, EUR/GBP is 0.94% currently at 0.7585.