GBP Keeps Bleeding, BoE and Norges Bank Stand Pat, Riksbank Hikes

Pound Erases BoE Gains, as Brexit Fears Remain

The pound kept tumbling on Thursday and during the Asian morning Friday, underperforming once again all the other G10 currencies. The British currency lost the most ground against NOK, JPY and NZD in that order, while it underperformed the least against CAD.

GBP/JPY — Technical Outlook

GBP/JPY traded south yesterday, breaking below the upside support line drawn from the low of November 22 nd, as well as below 143.10. This combined with the fact that the rate is trading below the downside line drawn from the high of December 13 th, keeps the short-term outlook somewhat negative.

Riksbank Hikes to Zero, Norges Bank Keeps Policy Steady

Apart from the BoE, we also had two more central banks deciding on interest rates: the Riksbank and the Norges Bank. As was widely anticipated, the Riksbank hiked rates by 25bps to 0%, becoming the first Bank to abandon the negative-rate regime, after adopting it back in 2015. The world’s oldest central bank noted that since the October meeting, developments have been broadly inline with its expectations, and that’s why they decided to hike, inline with their October forecast. Officials also said that the rate is expected to remain at 0% in the coming years.

USD/NOK — Technical Outlook

USD/NOK traded lower yesterday, but hit support at 8.945 and then, it rebounded somewhat. Overall, the pair is printing lower highs and lower lows below the 9.076 hurdle, which acted as the lower boundary of the sideways range that contained the price action from October 31 stuntil December 12 th. Thus, we would consider the short-term outlook to be negative for now.

As for Today’s Events

We get the final GDP data from the UK and the US. Both are expected to confirm their second estimates. From the US, we also get personal income and spending for November, as well as the core PCE index for the month. Income is forecast to have increased 0.3% mom after stagnating in October, while the spending rate is anticipated to have ticked up to +0.4% mom from +0.3%. The yoy core PCE rate is forecast to have held steady +1.6% yoy.

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