GBP/USD Analysis: Thursday’s breakdown and close below 200-day SMA favours bearish traders
The GBP/USD pair regains some positive traction on the last day of the week and reverses a part of the previous day's slide to sub-1.2400 levels, or its lowest level since June 7. Spot prices stick to modest intraday gains through the early European session and draw support from a modest US Dollar (USD) weakness. The People’s Bank of China (PBoC) lowered the Reserve Ratio Requirements for local lenders by 25 bps. This is the second such move this year and is expected to release more liquidity, which should potentially shore up growth in the world's second-largest economy. Adding to this, China reported better-than-expected Industrial Production and Retail Sales figures for August. The combination of factors boosts investors' confidence and prompts some profit-taking around the safe-haven Greenback. Read more...
GBP/USD sell bias as the BoE may look to pause rates? [Video]
Recent economic data from the UK has fuelled speculation that the Bank of England is starting to consider pausing interest rate hikes in the UK. Furthermore, some recent speeches from MPC members have added fuel to this speculation. BoE’s Governor Bailey recently said that monetary policy is much nearer now to the top of the cycle, BoE’s Cunliffe pointed to the mixed signals about the economy, and dovish Dhingra said that the policy is already sufficiently restrictive. Read more...
Pound Sterling finds interim support despite persistent inflation risks
The Pound Sterling (GBP) attempts a recovery move as investors start digesting the upside risks of the global economic slowdown, while the absence of supportive fundamentals keeps the overall trend wobbly. The GBP/USD pair could resume the downside journey as the tight interest rate policy by the Bank of England (BoE) has dampened the labor demand outlook and has exposed the economy to a possible recession.
The UK economy shrank in July due to a sheer decline in service sector output as persistent inflation narrowed households’ pockets. Inflation risks are skewed to the upside as wage growth remains strong. The Pound Sterling is expected to deliver a bumpy ride as investors shift focus to the Consumer Price Index (CPI) data for August, which will be released next Wednesday. Read more...
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