December 6, 2011
It was a day of consolidation for the pound, as it basically stayed within its average true range versus the dollar and the yen. GBP/USD basically traded between the 1.5600 and 1.5700 handles before closing at 1.5647, up just 14 pips on the day. Meanwhile, GBP/JPY failed to make any new significant highs or lows and finish at 121.58, marking a 31-pip loss.
The pound benefited from the release of the services PMI report, which printed at 52.1 Not only was this higher than the expected (50.6), but it was also an improvement from the previous month’s release of 51.3.
Digging deeper though, the numbers aren’t as nice as you would think. The new orders, future activity, and employment components were all disappointing, and it appears that we’ll continue to see sluggish performances in 2012.
For today, we’ve got housing data on deck in the form of the Halifax housing price index, due at 8:00 am GMT. Housing prices grew by 1.2% in October, which was a nice reversal from the previous trend of declining home prices. If we see a substantial increase in today’s report, it could give the pound a nice boost and allow it to set off for new highs.
"The only cable I watch is the pound baby."