British Pound Is Approaching 1.53 | IFCM UAE
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British Pound Is Approaching 1.53 - 20.2.2013

The US dollar has fallen a bit to 93.00 against the yen after Japanese Prime Minister Shinzo Abe denied the need to create a special fund for purchasing foreign bonds. Foundation of such a fund was a part of the Liberal Democratic Party platform. We recall that this party has won the elections in December. As we expected, the representatives of the Japanese Cabinet are in no hurry to comment on the current exchange rate and set its "desired" level, after the Group of 20 meeting at the end of last week. We recall that the G-20 expressed its commitment to the market currency values formation mechanisms in a joint statement. Abe has also confirmed that the government should be very careful commenting the rate of the yen. So far, USDJPY keeps consolidating in the range 92.50-94.50, and market participants are waiting for new signals on the future central bank policy that may occur after the election of new chairman. Euro grew against the U.S. dollar during morning trading on Wednesday. The pair has been trading above1.34 at the beginning of the European session. Yesterday's encouraging business confidence data still helped the single currency to get torn off the 1- month low at 1.33. Following the euro, the Swiss Franc grew against the US dollar amid improved market sentiment. At the same time, the Swiss National Bank chairman - Thomas Jordan confirmed that the central bank is unlikely to cancel the allowed limit of the national currency strengthening, set in 2011 at 1.2 EUR CHF . The British pound came tightly close 1.53 vs. the US dollar. In the previous market overviews we have set the technical target for GBPUSD at 1.5380 that was reached today after the February BOE meeting reports and the labor market data. Unemployment unexpectedly rose in December to 7.8%, despite a significant increase in the number of employees that exceeded market forecasts. But the more negative factor for the pound was especially the central bank meeting minutes, which confirmed its willingness to accept temporarily higher inflation level than it is required by the mandate, in order to accelerate the economic recovery process. In addition, there was a discussion meeting concerning the possibility of actively expanding stimulus programs. All these factors are negative for the British pound currently trading at the lowest level since early June.
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