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24 Feb 2015
GBP/USD declines as Carney fails to boost Gilt yields
FXStreet (Mumbai) - The GBP/USD pair fell into losses on Tuesday after a slightly hawkish comments from the Bank of England (BOE) governor Carney failed to push up the Gilt yields in the UK. The 10-year Gilt yield in the UK erased gains, thereby weakening the British Pound.
GBP/USD: bond yield spread favors USD
The BOE governor Carney stood by his view today that the next move is likely to be an interest rate hike, while stating that the modest rise in interest rates is necessary to achieve the inflation target. Despite the hawkish comments, the 10-year yield in the UK trades largely unchanged for the day at 1.802%, after having declined from a high of 1.834%.
Meanwhile, the 10-year US Treasury yield has strengthened 2.3 basis points to 2.08 ahead of Fed Chairwoman Yellen’s testimony to congress. It remains to be seen whether Yellen favors holding interest rates at record lows for longer time or indicates a rate hike by mid-2015. For now, the bond yield spread remains in favor of the US dollar.
GBP/USD Technical Levels
The pair currently trades 0.16% lower at 1.5333. The immediate support is located at 1.54, under which losses could be extended to 1.5342 (Feb. 20 low). On the flip side, resistance is seen at 1.5478 (100-DMA) and 1.55 levels.
GBP/USD: bond yield spread favors USD
The BOE governor Carney stood by his view today that the next move is likely to be an interest rate hike, while stating that the modest rise in interest rates is necessary to achieve the inflation target. Despite the hawkish comments, the 10-year yield in the UK trades largely unchanged for the day at 1.802%, after having declined from a high of 1.834%.
Meanwhile, the 10-year US Treasury yield has strengthened 2.3 basis points to 2.08 ahead of Fed Chairwoman Yellen’s testimony to congress. It remains to be seen whether Yellen favors holding interest rates at record lows for longer time or indicates a rate hike by mid-2015. For now, the bond yield spread remains in favor of the US dollar.
GBP/USD Technical Levels
The pair currently trades 0.16% lower at 1.5333. The immediate support is located at 1.54, under which losses could be extended to 1.5342 (Feb. 20 low). On the flip side, resistance is seen at 1.5478 (100-DMA) and 1.55 levels.