Tuesday, 13 May 2014

Forex Outlook: British Pound Upbeat On Expected Economic Growth

The pound advanced against other major currencies, with the expectations of growth in the economy after a strong first quarter. Analysts estimate a 3 % economic growth this year, which was above the level of the previous estimate of 2.6 %. Similarly, the projected growth for 2015 was hiked to 2.7 % from the previous prediction of 2.5 %.

The Bank of England's quarterly inflation report and Governor Mark Carney press conference scheduled later in this week are keenly watched by traders for any evidence of change in interest rates. The central bank is expected by economists to raise interest rates before U.K.'s national elections, in early 2015.

Against the euro, the pound advanced to 0.8145 for the first time since January 2013, making an increase of 0.2 % compared to last week's closing quote of 0.8165. Resistance might be encountered by the pound around the 0.805 zone.

Against the yen, the pound advanced making a session's high of 172.30. The pound might face the next possible resistance at the 173.6 zone.Against the dollar, the pound stretched to a high at 1.6896. Speculation for the pound is that it might find a resistance level at 1.70 zone, if the bullish trend continues.