Poor retail sales knocked the pound yesterday, will the borrowing figures continue that trend this morning? (Mike Vaughan)

Following the surprise decision from the FED to not taper QE the pound found some strong support against the USD and remained above the 1.19 level against the Euro, however following poor retail sales figures yesterday the surge was halted shifting 1 cent against the Euro and a similar level against the greenback. This trend could well continue this morning with public sector net borrowing figures released in the UK at 09:30

Elsewhere Euro buyers should watch out for Euro zone consumer confidence figures at 15:00 BST – these are expected to show a slight improvement and may lend some support to the Euro this afternoon.

Across the pond watch out for a speech from James Bullard and Esther George from the Federal Reserve at 17:00 – this is likely to give clues as to why the FED decided against reducing QE and insight as to future policies the FED may have in store. For me the tapering of QE is still a policy the FED will look to continue with and I would still expect this to happen before the end of the year. For dollar buyers the current levels are close to the year high (GBP/USD) and to me represents a good buy opportunity as I believe the dollar will find strength in the coming months heading back towards the 1.55 territory.

For anyone looking at the AUD and NZD both these currencies have found some support following the FED decision. I feel anyone selling AUD or NZD should look at this as an opportunity to sell as I firmly believe the pound will return to 1.75 against the AUD and 1.95 for the NZD and possibly further as we head towards the winter months.

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