StockMarketWire.com - Sterling currency pairs were undeterred by the announcement that the Bank of England (BoE) viewed more quantitative easing (QE) as a likelihood in order to suppress long-term bond prices. What historically would be a bullish tone for a currency has, so far, had a muted response from currency traders.
The BoE announcement followed better-than-expected data from a declining unemployment rate to 7.7%. The number of people claiming unemployment-related benefits in December fell by 12,100 compared to the previous month's fall of 8,900 which had been revised from a decline of 3,000. Analysts had been expecting an increase of 400.
However, in light of action undertaken by both the Bank of Japan (BoJ) and the US Federal Reserve regarding monetary stimulus, it is likely the BoE will conclude with further stimulus as it looks to protect UK export competition.
As a result, the GBP/JPY has headed higher to Y140.02 up from a daily low of ¥139.20. The pair has now come in for support at the Y139.92 level, remaining below both a 50 and a 100 day simple moving average (SMA).
Strength and momentum indicators are poised for a move further down, in which case could see the pair make a fresh low for the day at sub-¥139.19.
Story provided by StockMarketWire.com
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