April 15, 2011
Boom, baby! After GBP/USD’s choppy movement on Wednesday, the pair suddenly burst with life yesterday. It closed the session at 1.6347, almost 100 pips higher from its opening price.
There were two main reasons behind the pound’s climb. First, the Nationwide consumer confidence came out with a very positive result. It printed a reading of 44, significantly higher than the 40 the market initially expected. The pound also benefited from the market’s skepticism that the U.S. could handle its huge budget deficit given the extreme differences in opinions in the government.
No data coming out today from U.K., but do keep a close eye on Chinese data coming out at 2:00 am GMT. If the Chinese gross domestic product (expected to show a 9.5% growth) and the consumer price index (predicted to print a 5.2% rise) come out better than forecast, we could see risk appetite pop up again and help the pound rise!
"The only cable I watch is the pound baby."