GBP/USD – Holding around 1.5450
_iNVEZZ.com June 25th_: The Confederation of British Industry released its Distributive Trades Survey – Realized today at 11:00 BST. The survey indicates short-term trends in the UK’s retail and wholesale distribution sectors.
On a monthly basis the value improved to +1 point in June, bettering the expected reading of -1 and well above April’s –11.
The pair seems to have been unaffected by the news, with the quote steady around the 1.5450 level.
The general trend for sterling continues to look bullish.
The USD lost momentum yesterday after two Federal Reserve Bank presidents made statements indicating a recalibration of Chairman Bernanke’s utterances last week on a possible timetable for QE tapering.
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The president of the Federal Reserve Bank of Dallas, Richard Fisher, said in London yesterday, “What we’re talking about here is dialing back; The word ‘exit’ is not appropriate here.”. Fisher has been critical of QE to this point, but is non-voting on the Federal Open Market Committee (FOMC) this year.
And according to the Minneapolis Fed president, Narayana Kocherlakota, the Fed’s policy must remain accommodative “for a considerable time” after the end of quantitative easing. Also non-voting this year, Kocherlakota added that the cessation of fiscal asset buying should be tied to some threshold for the unemployment rate.
The unemployment target is below 6.5 percent. In May the US jobless level was at 7.6 percent.
Kocherlakota elaborated: “The committee should continue to buy assets at least until the unemployment rate has fallen below 7 percent. The purchases should continue as long as the medium-term outlook for the inflation rate remains below 2.5 percent and longer-term inflation expectations remain well anchored.”
Fisher and Kocherlakota both get to vote next year on the FOMC, when its members will be deciding if and when to end QE.
Meanwhile, New York Fed president William C. Dudley, who has a permanent vote on the panel, observed on June 23 that the Fed had been too optimistic about the economy in the past.
In an interview with the Financial Times, Fisher said, “Investors shouldn’t overreact to the central bank’s plan to reduce the pace of asset purchases.” Investors, he said, had behaved like “feral hogs” after Bernanke’s June 19 comments.