GBP/USD Forecast: British pound to struggle to rebound as Brexit tensions escalate
GBP/USD has failed to break above 1.3500 on Friday and started the new week on the back foot amid renewed Brexit tensions following the Bank of England's (BoE) dovish surprise. Unless the pair manages to make a daily close above 1.3500, recovery attempts are likely to remain limited in the near term with fundamental drivers staying bearish. Read more...
BoE's Gov Bailey: Will have to act with rates if we see evidence of higher inflation expectations feeding into wages
The Bank of England's governor, Andrew Bailey, has stated in recent trade that the Old Lady will have to act with rates if there is evidence of higher inflation expectations feeding into wages. Bailey is essentially echoing his recent message about the direction of monetary policy which last week led to a jolt in financial markets. Read more...
GBP/USD extends rebound above 1.3550
The GBP/USD pair is recovering on Monday after falling last week to 1.3423, the lowest level in a month and slightly above the YTD low. During the American session, cable rose to 1.3578, reaching a fresh intraday high. It is hovering around 1.3550, up more than 70 pips for the day. The recovery in GBP/USD is being driven by a weaker US dollar across the board. The greenback is retreating after last week rally, continuing the move that started on Friday after the NFP. Read more...
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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