The Bank of England's Chief Economist and Member of the Monetary Policy Committee Spencer Dale struck a hawkish note this morning at a speech in Essex, England. According to Dale, the UK economy has stabilised and is on its way out of recession - this comes despite continuing negative GDP forecasts from economic analysts. Dale based his analysis on recent business surveys as well as information from the BoE's regional offices. He warned of rising inflation in 2010 as a result of the monetary and fiscal stimulus created by the UK government and the BoE, but added that the rise would probably be temporary given the high levels of spare capacity in the economy. Dale also commented that he did not see signs of asset bubbles developing. In other news, UK November Construction PMI came out roughly as expected this morning at 47.0. As risk appetite has recovered from the Dubai Default GBPUSD has rallied from last week's low of 1.6270, and Sterling has shown strength against the Euro as well. At Go Forex we see Cable as continuing to be range-traded between 1.6300 - 1.6800 as the fundamental outlook for the UK economy has not shown any concrete improvement vis-a-vis the U.S. economy.
GBPUSD Support/Resistance: 1.6644/1.6693
EURGBP Support/Resistance: 0.9034/0.9064