Pound Trading Lower Ahead Of The BoE Interest Rate Decision

Pound Trading Lower Ahead Of The BoE Interest Rate Decision

For the 24 hours to 23:00 GMT, GBP fell 0.28% against the USD and closed at 1.6015, as the narrowing trade deficit failed to shrug off the prevailing weakness in Pound following a recent raft of disappointing economic releases.

Yesterday, the economic data indicated that visible trade deficit in the UK narrowed to £9.2 billion in November, from a revised deficit of £9.5 billion in October. The total trade deficit decreased to £3.5 billion in November, from a revised £3.7 billion deficit in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.6012, with the GBP trading marginally lower from yesterday’s close.

The pair is expected to find support at 1.5978, and a fall through could take it to the next support level of 1.5944. The pair is expected to find its first resistance at 1.6060, and a rise through could take it to the next resistance level of 1.6109.

In the UK, investors keenly await the BoE interest rate decision as they speculated that Mervyn King may keep the size of its bond buying program unchanged at £375 billion and the interest rates unchanged at record low 0.50%. However some market participants expect the bank to flag the possibility of rate cuts later in the year.