Carney: “The age of irresponsibility is over”
The GBP continued its advance against the USD during the day yesterday, with many analysts watching for any signs of a critical push over the 1.5500 mark. However, the currency fell just shy of breaking ground at these psychological levels and instead retreated back over the course of the evening last night.
For those who are inclined to charting, there are signs to suggest that if the Pound can press over the 1.5500 mark, then there are many heavy barriers to negotiate in order to continue appreciation. Once again, the GBPEUR was even tempered and the same pattern of a slow and steady increase in GBP strength was observed, as we have seen during several of the last days of exchange.
There was positive news for the UK, as a key research figure forecast that the UK GDP would improve by 0.6% during the coming three months – up from 0.5% in the previous forecast reading. So much of the speech given by Bank of England Governor, Mark Carney, was focussed on the culture of banking and, in particular, the prevalence of rogue practices that have led to significant losses on behalf of many large financial institutions.
Mr Carney was unabashedly critical of the Bank of England itself, saying that the Bank was not effective in identifying the ‘scale of risks in the system’ and did not spot gaps in the regulatory architecture. He talked about a renewal of efforts to incite a change in the ethics and practices of these organisations and their regulatory obedience.
Today we await the release of the US Retail Sales figure, forecast for a considerable improvement over the last delivery and this, if accurate, would prove pivotal for the GBPUSD direction. Outside of the London trading session, we observed a number of antipodean economic releases including a reduction in the New Zealand interest rate and some especially robust Australian employment figures.