News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bearish
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • - Adds that Russia will defend its borders by all possible means, including militarily
  • Russian Foreign Ministry says the UK and US are trying to incite conflict in the Black Sea after warship incident - RIA
  • Gold Prices May Fall as US PCE Data Stokes Fed Rate Hike Bets - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/06/25/Gold-Prices-May-Fall-as-US-PCE-Data-Stokes-Fed-Rate-Hike-Bets.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #gold #xauusd #fed #inflation #fomc #pce https://t.co/qLkrgyInSM
  • Forex Update: As of 07:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.26% 🇨🇦CAD: 0.16% 🇦🇺AUD: 0.14% 🇯🇵JPY: 0.09% 🇨🇭CHF: 0.03% 🇬🇧GBP: -0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/5S3ZpJ2yhI
  • Indices Update: As of 07:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.27% France 40: 0.14% FTSE 100: 0.11% Germany 30: 0.07% US 500: 0.05% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/QWG4ivX4Zs
  • Crude Oil Prices at Risk as Chart Setup Hints at Fading Momentum - https://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2021/06/25/Crude-Oil-Prices-at-Risk-as-Chart-Setup-Hints-at-Fading-Momentum.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Spivak&utm_campaign=twr #OOTT #crudeoil
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here: https://t.co/IsnpfJhp91 https://t.co/tEepDXjP2O
  • 🇩🇪 GfK Consumer Confidence (JUL) Actual: -0.3 Expected: -4 Previous: -6.9 https://www.dailyfx.com/economic-calendar#2021-06-25
  • Heads Up:🇩🇪 GfK Consumer Confidence (JUL) due at 06:00 GMT (15min) Expected: -4 Previous: -7 https://www.dailyfx.com/economic-calendar#2021-06-25
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/lxOWWEb8p0
British Pound Aims Higher with BOE Stimulus Unwind in Focus

British Pound Aims Higher with BOE Stimulus Unwind in Focus

Ilya Spivak, Head Strategist, APAC

BRITISH POUND FORECAST:

  • British Pound up with UK inflation bets before BOE policy meeting
  • All eyes on MPC plans for unwinding Covid-era stimulus program
  • EUR/GBP support breach hints a move below 0.86 is in the cards

The British Pound has managed to outperform against most of its G10 FX counterparts this week, scoring outsized victories against European counterparts like the Euro, Norwegian Krone and Swedish Krona. The move may reflect pre-positioning ahead of today’s Bank of England (BOE) policy announcement.

This probably amounts to speculation that the BOE will move faster to reduce Covid-era stimulus than regional peers, where a committed dovish tilt persisted long before the pandemic. Tellingly, inflation expectations priced into UK bond markets rose alongside Sterling this week.

Governor Andrew Bailey and company are widely expected to revise economic projections upward, reflecting a spirited recovery in activity growth since the beginning of the year. Leading PMI survey data suggests the manufacturing and service sectors expanded at the fast pace in 7.5 years in April.

BRITISH POUND LOOKS TO BOE QE GUIDANCE FOR DIRECTION

This much is unlikely to stir markets further unless policymakers’ updated expectations see inflation holding meaningfully above 2 percent toward the end of the forecast period. That could be read as decidedly hawkish, but such an outcome appears to be unlikely.

Guidance on the pace of asset purchases is likely to have the most significant influence on price action. This can come via the updated quarterly Inflation Report, minutes from the meeting of the policy-setting MPC committee, or the governor’s post-announcement press conference.

As it stands, the current QE effort will hit its uptake target in November. Mr Bailey asked central bank staff to come up with a plan for winding purchases back in February and any insight on their thinking here will be closely scrutinized.

Rhetoric suggesting limited scope for a top-up could lift the UK currency. Reducing the size of purchases to extend the program while tapering it off for a smooth exit into the year-end is another option, and is likewise likely to be interpreted as GBP-positive.

BRITISH POUND TECHNICAL ANALYSIS – EUR/GBP EYES SUPPORT BELOW 0.86

The British Pound may be aiming to resume its uptrend against the Euro as the BOE rate decision approaches. The EUR/GBP exchange rate broke through near-term rising trend support guiding its recovery since early April, hinting that the dominant 2021 decline might be back in play.

Immediate support is at 0.8587. A break below that faces a minor barrier at 0.8540 along the way lower toward the pivotal swing low at 0.8472. Neutralizing near-term selling pressure probably calls for a daily close above the 0.8719-31 region. That could pave the way for a retest of former support below the 0.89 figure.

British Pound Aims Higher with BOE Stimulus Unwind in Focus

EUR/GBP chart created with TradingView

FX TRADING RESOURCES

--- Written by Ilya Spivak, Head Strategist, APAC at DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES