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.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Bearish
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
Gold
Mixed
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Notice

DailyFX PLUS Content Now Available Freely to all DailyFX Users

Real Time News
  • Central bank independence has several advantages. Find out what they are in detail with @MartinSEssex here: https://t.co/wVFXbbTxf1 https://t.co/cQQmuH8biQ
  • The US Dollar remains in consolidation mode against the Philippine Peso and Indian Rupee. Will the Singapore Dollar weaken as $USDSGD rising support holds ahead? Find out from @ddubrovskyFX here: https://t.co/HZ8Loqj3Ey https://t.co/6PCFkdj3ka
  • Follow @DailyFXedu for your regular #webinar updates with @DailyFX analysts and catch up on the webinars you missed. https://t.co/Da10QUg9r1
  • Greed has proven to be a hindrance more than assistance for traders. How does greed lead to #FOMOintrading? Find out from @RichardSnowFX here: https://t.co/aT8TZjlFqP https://t.co/Le8Qx6OOwV
  • $GBPUSD at the moment break-even straddles = 152pips meaning that for option traders to realize gains, the spot price must see a move greater than 152pips. Get your market update from @JMcQueenFX here: https://t.co/odj2lLRrGf https://t.co/RXCBwHGluG
  • $EURGBP has fallen over 6% since August and is now rapidly approaching a critical support level not reached since May. Will a break below accelerate the aggressive selloff? Find out from @ZabelinDimitri here: https://t.co/CBM8Fg7vM0 https://t.co/0yDnEpzQqR
  • The #Euro is struggling for direction against the US Dollar but the near-term downtrend guiding it lower since late June remains firmly intact. Where is $EURUSD heading? Get your technical analysis from @IlyaSpivak here: https://t.co/us6AINmuoe https://t.co/J4hQtyprYf
  • $DXY & $SPX500 hold steady after #FED rate cut. Get your update from @JohnKicklighter here: https://t.co/vqXlKCMDYA
  • Dow Jones & Dax 30 levels to watch ahead of the fed from @PeterHanksFX here: https://t.co/iUIrsygKz2
  • The politics of the US and UK may be starkly divided but their grip on the vast, $6.6 trillion global foreign exchange trade seems as tight as ever. Get your market update from @DavidCottleFX here:https://t.co/xTKHOvrIqg https://t.co/vtHhdnF82Q
GBP/USD Risks Larger Rebound on Fed Doves; Higher-Lows in Focus

GBP/USD Risks Larger Rebound on Fed Doves; Higher-Lows in Focus

2014-09-19 00:30:00
David Song, Currency Strategist
Share:
GBP/USD Risks Larger Rebound on Fed Doves; Higher-Lows in Focus

Fundamental Forecast for Pound:Bullish

The GBP/USD fell back from a fresh weekly high of 1.6523 even as Scotland voted to stay within the U.K., but fresh commentary coming out of the Federal Reserve may spur a further advance in the exchange rate should the group of central bank doves talk down interest rate expectations.

A further expansion in U.K. home loans may encourage an improved outlook for growth, but market participants may ultimately turn a blind eye to the minor data prints coming out of the U.K. as the Federal Open Market Committee (FOMC) is widely expected to halt its quantitative easing (QE) program at the October 29 meeting. The key speeches by Fed voting-members William Dudley, Narayana Kocherlakota Jerome Powell and Loretta Mester may play a greater role in driving the GBP/USD next week amid growing speculation of seeing a rate hike sooner rather than later.

Indeed, a greater emphasis to retain the zero-interest rate policy (ZIRP) for an extended period of time may undermine the bullish sentiment surrounding the greenback as Credit Suisse Overnight Index Swaps show a jump in interest rate expectations, with bets of seeing at least 50bp worth of rate hikes in the next 12-months. As a result, a wave of dovish remarks from Fed officials may generate a more meaningful rebound in the GBP/USD as the Bank of England (BoE) sticks to its current course for normalizing monetary policy.

Despite the failure to hold above the 1.6500 handle, the recent series of higher-lows in the GBP/USD certainly paints a constructive outlook for the British Pound, and we may see the pound-dollar break out of the downward trending channel carried over from back in July should the group of Fed officials remain reluctant to move away from the highly accommodative policy stance. - DS

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

DISCLOSURES

News & Analysis at your fingertips.