Sterling drops sharply after BoE stands pat, disappointing those who expected a hike. Euro is currently following as the second weakest for the day. On the other hand, Yen and Swiss Franc rise broadly, supported by falling benchmark yields in Germany and UK. Dollar is also firm as general investor sentiment is cautious, awaiting tomorrow's non-farm payroll report. Technically, GBP/CHF extends recent decline and hits as low as 1.2350 so far. Choppy fall from 1.3070 is seen as a corrective move. Hence, we'd expect strong support from 1.2259 to contain downside to bring rebound. However, firm break of 1.2259 would argue that medium term trend has already reversed. If that happens, medium term bearishness of the Pound would be confirmed if EUR/GBP also breaks 0.8656 resistance. In Europe, at the time of writing, FTSE is up 0.43%. DAX is up 0.54%. CAC is up 0.39%. Germany 10-year yield is down -0.022 at -0.189. Earlier in Asia, Nikkei rose 0.93%. Hong Kong HSI rose 0.80%. China Shanghai SSE rose 0.81%. Japan 10-year JGB yield dropped -0.0021 to 0.082. |
