Forex Intraday Round-up: The British Pound Gains on BoE Minutes Release

on Nov 21, 2012

**The Pound Gains Against Weaker Dollar and Euro**

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The British pound gained against both the euro and the dollar as European finance ministers failed to agree on a bail-out package for Greece and the Bank of England policy makers expressed doubt in the efficiency of bond purchases.
The EUR/GBP plunged by 40-pips to a session low of 0.8006 but then paired some of its losses and managed to overcome the 0.8027 resistance. At 12.24 GMT the pair was trading at 0.8033/36 or 0.16 percent lower than yesterday. The technical analyst team at argued that if the EUR/GBP breaks the 0.8055 level it will meet short-term resistances at 0.8065 and 0.8076. In the more likely case of strengthening of the pound against the euro, the pair will receive support at 0.8023 and 0.8013.

The closely examined minutes from the Bank of England policy meeting showed that officials voted 8 against 1 to halt the expansion of the quantitative-easing program this month. The only member of the Monetary Policy Committee to disagree was David Miles, who called for a £25 billion increase in bond purchases. The committee also voted to keep interest rates unchanged at the record low level of 0.5 percent.

“We expect the pound to weaken against the dollar but outperform the euro,” said Michael Derks, chief strategist at FxPro Group, as quoted by Bloomberg. “Greece remains a major problem and there will be a lot of nervousness ahead of the next meeting on Nov. 26. The pound should be well supported against the euro.”
**The Franc Remains in Yesterday’s Trading Area Amid Eurozone Uncertainty**

The Swiss franc rallied in early trading today against the dollar despite no decisions made during the Eurogroup meeting. The USD/CHF reached a session low of 0.9396 on the back of positive remarks from Jean-Claude Juncker and Christine Lagarde. German Chancellor Angela Merkel also supported the currency by insisting that lower interest rates and increasing the European Financial Stability Facility (EFSF) by €10 billion are the solutions to the financing hole Greece is facing. After the end of today’s meeting between Eurozone finance ministers, the International Monetary Fund and the European Central Bank, French Finance Minister Pierre Moscovici said a deal was just “a whisker away”.

!m[Swiss Franc Holds Ground Despite Eurozone Troubles, Aussie Retreats](/uploads/story/868/thumbs/pic1_inline.png)According to the, the decline of the USD/CHF pair paused just ahead of the 0.9390 support level. Technical analysis shows that if it breaks below that mark, the next support level is seen at 0.9380 (7 November low) and 0.9330. On the upside resistance is to expected at the 20 November high of 0.9430, the intraday high of 0.9460 and 16 November high of 0.9490.
**Australian Dollar Retreats, Government Excited the Aussie to be Included in COFER**
After reaching an intraday-high of 1.0396, the AUD/USD lost ground and at 13.08 GMT was trading at 1.0360/62 or 0.27 percent lower than yesterday.
Today the Australian government praised the IMF for its intention to count the Aussie as a foreign reserve currency, as it considered the move an endorsement of the country’s economic strength.
Last week the IMF said that the Canadian and Australian dollar should be included in the so-called Currency Composition of Official Foreign Exchange Reserves (COFER) starting next year. The current foreign holdings of the COFER include US dollars, euro, British pounds, Japanese yen and Swiss francs. “This IMF decision is yet more confirmation that Australia is seen as a safe haven for global capital and one of the most attractive investment destinations in the world,” said Treasurer Wayne Swan in a statement.
Glenn Stevens, Reserve Bank of Australia governor, downplayed the move as a “technicality” and said that the Aussie has been a “small reserve currency for quite a few countries for about 25 years”


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