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Pound Dollar Forecast 24 Mar 2011

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Pound Dollar 24 Mar 2011

With this week’s data showing the UK inflation rate at almost 5% and likely to get worse, it is really only a matter of time before interest rates start to rise. The technical picture on the monthly gbp usd chart would seem to support this as the pair inch towards the 1.67 to 1.70 highs of 2009. ┬áThe only caveat to any continuation of this longer term bullish move would be if the usd index manages to hold the key 75 level and finally manages to find some traction for a move higher.

Why traders focus on headline inflation & why sterling rose this week.