Pound sterling recovers against dollar

Pound Sterling pared some of its losses from a new 6 year low on Thursday after the rate cut from the BOE, with investors satisfied with the 100 basis point cut in the Bank of England's benchmark interest rate and the Bank of England's key rate is now reached at 2 percent.

 

The Bank of England slashed interest rates to their lowest level since 1951 on Thursday but commented that further steps would be required to prevent a credit squeeze tipping Britain's economy into a deep recession.

 

At the same time UK's largest mortgage lender, Halifax, reports a massive 2.6% m/m drop in house prices in Nov, to take the annual 3mth/3mth rate down to -14.9%, from -13.7% in Oct, in contrast to market expectations for a 1% m/m drop (for a -14.2% y/y rate).

This follows a 2.2% m/m decline in Oct, and is in sharp contrast to the surprisingly modest 0.4% m/m fall (-13.9% y/y), previously reported by Nationwide for the same month. 

The UK purchasing managers' index for the services sector fell to a new record low of 40.1 in November from 42.4 in October, and the lowest score since the index began in 1996, well below expectations for a smaller fall to 41.2.

Weak UK manufacturing and mortgage data also influenced the sterling movements. According to the report an index of manufacturing in the U.K. fell from 40.7 to a record low of 34.4 in November. In the Euro zone, the manufacturing index fell from 41.1 to a record low of 35.6 in November.

Last day in spot trading, sterling closed at 1.4676against the dollar, after trading in the range 1.4813-1.4467

 

 

Expecting bullish movements above 155.45.Resistances are 157.55, 160.80, 163.40; Supports are 153.40, 142, 150.80 and 149.80.

 

Last day DGBP (dec.) traded in the range 148 -144.90 and closed at 147.59