Pounds To Dollars - Daily Currency Rates 12th August 2009

Pounds To Dollars - Daily Currency Rates 12th August 2009

Following the last three days of sharp falls on the pounds to dollars daily chart the currency pair took a breather yesterday ending the trading session with a tiny spinning top ahead of the two day FOMC meeting which is due to conclude later today.  The pound dollar pair is now perched precariously on the 40 day moving average which is almost acting as a tightrope, and in addition the support platform at this level is now fully in play.  Whilst these factors will dictate the technical picture the fundamental news on the economic calendar from the FED tonight is far more powerful and likely to produce a volatile reaction in Cable as soon as the statement hits the news wires and is digested by the broader markets.   Should the FED hint at interest rate rises sooner rather than later, then this could trigger a boost in the US Dollar with a consequent fall in the pound dollar pair.  The reason for this is that this would signal the start of improving yields for what is currently a low yielding currency.  The congestion in the USD1.64-USD1.60 price band is now key, and should this be breached then this could be the start of a longer term bearish reversal from the highs of the last few weeks.  The fundamental news today for the UK has been dominated by two items, the first of which was unemployment which rose once again to 7.8% (exceeding the forecast of 7.7%) and taking the jobless figures to a 12 year high of 2.4m.  The other item was a speech by BOE Governor Mervyn King in which he confirmed that inflation would miss its 2% target as the economy endures a very slow recovery.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.