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GBP/USD Weakens Then Rallies After Latest Bank of England Credit Survey

GBP/USD Weakens Then Rallies After Latest Bank of England Credit Survey

Martin Essex, MSTA,

Talking Points

-The availability of unsecured credit to UK households is expected to decrease further in Q2.

- On the demand side, total demand for secured lending for house purchase and remortgaging is forecast to increase, while lower capital investment is exerting a significant drag on demand for corporate lending.

- See the DailyFX Economic Calendar and see what live coverage for key event risk impacting FX markets is scheduled for the week on the DailyFX Webinar Calendar.

GBP/USD eased modestly in London Thursday then rallied after the Bank of England’s latest quarterly Credit Conditions Survey suggested a fall in the supply of credit in the UK alongside a rise in demand, implying that credit could become more expensive in the second quarter.

The data add to the pressures on UK consumers and therefore on the outlook for spending and economic growth, marginally decreasing the prospects of a rise in UK interest rates and therefore a negative for the British Pound.

Chart: GBP/USD 5’ Timeframe (April 12-13)

Chart by IG

In its survey, the central bank asks lenders about the past three months and the coming three months. It covers secured and unsecured lending to households; and lending to non-financial corporations, small businesses, and to non-bank financial firms.

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at

Follow Martin on Twitter @MartinSEssex

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