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31 Jul 2015
GBP/USD spikes to 1.5650 as the treasury yields drop
FXStreet (Mumbai) - The GBP/USD pair jumped to a session high of 1.5679 before settling around 1.5650 after the slowdown in the US wage growth pushed the treasury yields lower.
Slowdown in US wage growth hurts rate hike bets
The US Employment Cost Index (ECI) released today showed showed the 0.2% rise in wages in the second quarter is the smallest since 1982. The weak data raised concerns that the labor market strength is unable to result in higher pay. Consequently, the 2-year yield, which mimics rate hike expectations, fell 5.5 basis points to 0.676%.
The 2-year yield had shot above 0.74% earlier today after the upbeat Q2 GDP report increased rate hike bets. Moreover, the data also triggered profit taking on dollar longs ahead of the month end book closing.
GBP/USD Technical Levels
The immediate resistance is seen at 1.5690-1.5700 (weekly high), above which gains could be extended to 1.5754 (23.6% of June rally). On the flip side, support is seen at 1.5639 (38.2% of June rally) and 1.56 handle.
Slowdown in US wage growth hurts rate hike bets
The US Employment Cost Index (ECI) released today showed showed the 0.2% rise in wages in the second quarter is the smallest since 1982. The weak data raised concerns that the labor market strength is unable to result in higher pay. Consequently, the 2-year yield, which mimics rate hike expectations, fell 5.5 basis points to 0.676%.
The 2-year yield had shot above 0.74% earlier today after the upbeat Q2 GDP report increased rate hike bets. Moreover, the data also triggered profit taking on dollar longs ahead of the month end book closing.
GBP/USD Technical Levels
The immediate resistance is seen at 1.5690-1.5700 (weekly high), above which gains could be extended to 1.5754 (23.6% of June rally). On the flip side, support is seen at 1.5639 (38.2% of June rally) and 1.56 handle.