30 Jan 2015
No reaction in GBP/USD after a weak US GDP data
FXStreet (Mumbai) - The GBP/USD pair continues to trade largely unchanged around 1.5070 levels after the preliminary data in the US showed the growth rate slowed down in the fourth quarter of 2014.
Bond Yield differential at play
The British Pound has not strengthened despite slowdown in the US growth rate mainly due to 10-year Gilt yields trading at record lows in the UK. The 10-year Gilt yield currently trades 6.2 basis points lower at 1.36%; its record low level. Meanwhile, the weak GDP data in the US have pushed the 10-year Treasury yield lower by 7.7 basis points at 1.676%.
Moreover, the yield differential at the moment does favor Pound, however, the markets still believe that the Fed is likely to raise interest rates this year. On the other hand, low expectations from Bank of England have pushed the 10-year Gilt yield to record lows.
GBP/USD Technical Levels
The immediate support is seen at 1.5017, under which losses could be extended to 1.4990 levels. On the flip side, a rise above 1.5109 (5-DMA) levels shall open doors for a re-test of 1.5150 levels.
Bond Yield differential at play
The British Pound has not strengthened despite slowdown in the US growth rate mainly due to 10-year Gilt yields trading at record lows in the UK. The 10-year Gilt yield currently trades 6.2 basis points lower at 1.36%; its record low level. Meanwhile, the weak GDP data in the US have pushed the 10-year Treasury yield lower by 7.7 basis points at 1.676%.
Moreover, the yield differential at the moment does favor Pound, however, the markets still believe that the Fed is likely to raise interest rates this year. On the other hand, low expectations from Bank of England have pushed the 10-year Gilt yield to record lows.
GBP/USD Technical Levels
The immediate support is seen at 1.5017, under which losses could be extended to 1.4990 levels. On the flip side, a rise above 1.5109 (5-DMA) levels shall open doors for a re-test of 1.5150 levels.