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Forex - GBP/USD slides as markets prep for U.S. rate hikes in 2015

Published 12/19/2014, 12:23 PM
Updated 12/19/2014, 12:24 PM
Pound hovers lower against a firming dollar as market prices in 2015 rate hikes in the U.S.
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Investing.com - The pound fell against the dollar in subdued trading on Friday after investors digested the week's U.S. data and the Federal Reserve's reassuring language and bet that rate hikes are coming within less than a year.

In U.S. trading on Friday, GBP/USD was down 0.39% at 1.5610, up from a session low of 1.5606 and off a high of 1.5682.

Cable was likely to find support at 1.5543, Wednesday's low, and resistance at 1.5787, Tuesday's high.

The dollar enjoyed support after the U.S. Department of Labor said on Thursday that the number of individuals filing for initial jobless benefits in the week ending Dec. 12 fell by 6,000 to 289,000 from the previous week’s revised total of 295,000. Economist had forecast an increase of 1,000.

The data came a day after the Fed said it would be "patient" before raising rates, guidance which it said is consistent with earlier statements that rates would stay low "for a considerable time."

Fed Chair Janet Yellen said the central bank was unlikely to raise rates for the "next couple of meetings" indicating that a move in April at the earliest is possible.

Still, the dollar saw support on the notion that the days of rock-bottom interest rates in the U.S. are coming to an end in 2015.

Meanwhile across the Atlantic, the Office for National Statistics reported that U.K. public sector net borrowing rose by £13.41 billion last month, compared to expectations for an increase of £15.37 billion.

Separately, the Confederation of British Industry said its index of realized sales climbed to a 26-year high of 61 this month from 27 in November, blowing bast expectations for an increase to 30.

Elsewhere, sterling was up against the euro, with EUR/GBP down 0.05% at 0.7836, and up against the yen, with GBP/JPY up 0.23% at 186.65.

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