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.

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
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Bullish
Gold
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
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Join @MBForex at 8:30 AM ET/12:30 PM GMT for his weekly strategy #webinar Register here: https://t.co/VAnAfZU02T https://t.co/57Z0cB6HsJ
  • Heads Up:🇧🇷 BCB Focus Market Readout due at 11:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-28
  • 🇲🇽 Unemployment Rate (AUG) Actual: 5.2% Previous: 5.4% https://www.dailyfx.com/economic-calendar#2020-09-28
  • 🇲🇽 Unemployment Rate (AUG) Actual: 5.2% Previous: 5.4% https://www.dailyfx.com/economic-calendar#2020-09-28
  • 🇲🇽 Balance of Trade (AUG) Actual: $6.116B Previous: $5.799B https://www.dailyfx.com/economic-calendar#2020-09-28
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.52%, while traders in EUR/GBP are at opposite extremes with 63.81%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/omse6hWKhs
  • Heads Up:🇲🇽 Unemployment Rate (AUG) due at 11:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-28
  • Heads Up:🇲🇽 Balance of Trade (AUG) due at 11:00 GMT (15min) Previous: $5.799B https://www.dailyfx.com/economic-calendar#2020-09-28
  • Tune in to @CVecchioFX 's #webinar at 7:30 AM ET/11:30 AM GMT for insight on major event risk in the week ahead. Register here: https://t.co/X8TIhpKxtF https://t.co/iOooFjHqZM
  • Commodities Update: As of 10:00, these are your best and worst performers based on the London trading schedule: Silver: 0.39% Oil - US Crude: 0.24% Gold: -0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/3Xcd23YqRL
British Pound Faces Critical Test in Important Week Ahead

British Pound Faces Critical Test in Important Week Ahead

2015-03-20 22:35:00
David Rodriguez, Head of Product
Share:
British Pound Faces Critical Test in Important Week Ahead

Fundamental Forecast for British Pound: Neutral

The British Pound showed signs of life as it rallied for the first week in three versus the US Dollar, but concerns over the future of UK interest rates may continue to weigh on the domestic currency through the foreseeable future.

Last week we wrote it would be a pivotal stretch for the UK currency versus the US Dollar, and indeed surprises from the US Federal Reserve forced a major correction in all major USD pairs and pushed the GBP/USD off of its lows. Disappointments in UK economic data nonetheless held the Sterling back from larger gains and set the stage for another important week ahead.

The combination of UK Consumer Price Index inflation data and Retail Sales growth results promise continued volatility in the GBP and could ultimately set direction through the end of March. CPI figures in particular could have a material impact on expected Bank of England interest rate policy and by extension the GBP. And indeed, traders punished the British Pound as Bank of England chief economist Andrew Haldane unexpectedly told investors that the next policy move could in fact be an interest rate cut.

The surprising statement puts Haldane at odds with BoE Governor Carney who recently said it would be “extremely foolish” to cut interest rates now. As things stand, Haldane seems to be the sole voice in the 9-member Monetary Policy Committee to see a rate cut as a distinct possibility. Yet the market reaction was unambiguous: UK 2-year government bond yields tumbled to fresh monthly lows, and the British Pound moved in kind. Recent 1-week performance in major currencies matched changes in interest rate expectations with near-perfect accuracy and underlined the significance of future moves.

At the risk of coming off as hyperbolic and repetitive, we believe it is shaping up to be yet another pivotal week for the British Pound. The GBP/USD finished modestly higher this past week only because the US currency saw a much larger correction in yield expectations. Major reactions to surprises in CPI inflation and Retail Sales figures could ultimately determine broader direction in the UK currency.

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

DISCLOSURES