British Pound buckles as US yields rise puts Fed in command
The British Pound (GBP/USD) tested five-week lows of 1.3464 and trimmed some of its earlier losses on Monday, but it remains in the red, down 0.23% amid a light economic docket in the US and the UK as both countries’ central banks get ready to release their monetary policy decisions on Wednesday and Thursday, respectively. At the time of writing, GBP/USD trades at 1.3492.
Investors’ mood is neutral after beginning the week on the back foot, as Oil prices surged, driven by Houthi attacks on Saudi Arabia that damaged the East-West pipeline, which bypassed the closure of the Strait of Hormuz by routing through the Red Sea. Read more…
British Pound: BoE risks in focus – Scotiabank
Scotiabank strategists Shaun Osborne and Eric Theoret note the British Pound (GBP) is softer against the Dollar but still outperforming most G10 currencies in a risk-off environment. Markets expect a hawkish hold from the Bank of England (BoE) on Thursday, with a possible 25 bp hike in November. The analysts point to supportive UK-US yield spreads and see technical support around 1.3450–1.3420, with resistance above 1.3550.
“The pound is soft, down 0.3% vs. the USD while outperforming most of the G10 currencies in an environment of broad-based risk aversion and USD strength. The focus for the pound this week will center on domestic risk as market participants look to Thursday’s BoE where policymakers are widely expected to deliver a hawkish hold while leaning toward a 25bpt hike at the next meeting in early November.” Read more…
British Pound loses ground as markets brace for Fed, BoE monetary decisions
GBP/USD extends its decline on Monday and trades around 1.3470 at the time of writing, down 0.38% on the day. The pair falls to the lower end of its monthly range, weighed down by renewed demand for the US Dollar (USD) ahead of several major monetary policy decisions.
Investors’ attention is primarily focused on the US Federal Reserve (Fed) meeting, with its interest rate decision due on Wednesday. Expectations of tighter monetary policy have strengthened following the latest US inflation data. According to the CME FedWatch tool, markets are pricing in around an 88% chance of a 25-basis-point rate hike this week. Read more…
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