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
More View more
Real Time News
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.36% 🇯🇵JPY: 0.10% 🇬🇧GBP: 0.07% 🇪🇺EUR: 0.03% 🇨🇭CHF: 0.00% 🇨🇦CAD: -0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/hycxcTiQnV
  • Heads Up:🇦🇺 RBA Interest Rate Decision due at 04:30 GMT (15min) Expected: 0.1% Previous: 0.1% https://www.dailyfx.com/economic-calendar#2021-08-03
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.21% US 500: 0.16% France 40: -0.22% FTSE 100: -0.28% Germany 30: -0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/dqQkfkjnlD
  • Was an absolute please to be back on @ausbiztv again today with @NadineBlayney discussing the Australian Dollar ahead of the #RBA (due in 30min!) Check out the full clip below for my thoughts on where #AUD #AUDNZD may go here - https://t.co/XqMHkiLkid https://t.co/vY6vutdGjg
  • Wuhan to conduct citywide Covid tests after infections found -BBG
  • (Equities Special) Nasdaq 100 Forecast for the Week Ahead: Tech May Outperform the Dow Jones #NASDAQ #NASDAQ100 #DowJones #NFPs https://www.dailyfx.com/forex/fundamental/article/special_report/2021/08/03/Nasdaq-100-Forecast-for-the-Week-Ahead-Tech-May-Outperform-the-Dow-Jones.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/XhNIvtiBFD
  • Greed is a natural human emotion that affects individuals to varying degrees. Unfortunately, when viewed in the context of trading, greed has proven to be a hindrance more often than it has assisted traders. Learn how to control greed in trading here: https://t.co/kODPAfJE79 https://t.co/cg1xX4B68o
  • 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/iE8mGqZtLX
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.17% Gold: -0.11% Silver: -0.24% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/le5P0D0CaR
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.31% 🇯🇵JPY: 0.09% 🇬🇧GBP: 0.06% 🇪🇺EUR: 0.03% 🇨🇭CHF: 0.03% 🇨🇦CAD: -0.03% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/tEzSWPH3NA
GBP/USD Stalls at Key Juncture - Outlook Hinges on BoE, NFP

GBP/USD Stalls at Key Juncture - Outlook Hinges on BoE, NFP

David Song, Strategist
GBP/USD Stalls at Key Juncture - Outlook Hinges on BoE, NFP

Fundamental Forecast for British Pound: Neutral

The Bank of England’s (BoE) March 5 interest rate decision may have a limited impact on GBP/USD as the central bank is widely anticipated to retain its current policy, but the fundamental developments coming out of the U.K. may continue to boost the appeal of the sterling should the data prints highlight an improved outlook for growth and inflation.

Following the BoE testimony, it seems as though the Monetary Policy Committee (MPC) will continue to move towards a rate hike especially as Governor Mark Carney only sees a ‘temporary’ decline in U.K. inflation and retains the hawkish forward-guidance for monetary policy. With that said, a further pickup in U.K. Mortgage Approvals along with a faster expansion in the Purchasing Manager Indices (PMI) may boost interest rate expectations as a growing number of central bank officials show a greater willingness to normalize monetary policy over the near to medium-term.

At the same time, the U.S. Non-Farm Payrolls (NFP) report will also largely be in focus as it remains a race between the Fed and the BoE as to who will be the first to normalize monetary policy. Indeed, another 240K expansion in U.S. employment may further the argument for a mid-2015 rate hike, but Chair Janet Yellen and Co. may ultimately share a similar fate to their U.K. counterpart especially as Average Hourly Earnings are expected to narrow to an annualized 2.1% in February. As a result, the disinflationary environment may push the Fed to further delay its normalization cycle, while a pickup in U.K. economic activity may underpin a larger rebound in the British Pound as the central bank continues to prepare households and businesses for higher borrowing-costs.

Nevertheless, the lack of momentum to push and close above the former support zones around 1.5510-55 may produce range-bound prices in GBP/USD ahead of the key event risks, but the pair may make a more meaningful effort to retrace the decline from the previous year should the fundamental developments sway the interest rate outlook for the U.S. and U.K. As we open up the March trade, the opening monthly range may dictate the short-term outlook for the pound-dollar as the Fed is scheduled to deliver its next interest rate decision on March 18.

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

DISCLOSURES