British Pound (GBP) Latest: Sterling Retains a Bid as Jackson Hole Symposium Comes Into View
GBP/USD Price, Chart and Analysis:
- Cable retains a bid but the US dollar remains the key driver.
- All quiet on EU/UK trade talks.
Sterling Remains Better Bid But Headwinds Remain
The British Pound refuses to move lower with any short-term dips against a range of currencies being bought. GBP/USD is also getting a push higher from a weak US dollar complex and marginally higher UK bond (Gilts) yields with the 10-year back at a multi-week high. Sterling strength is seemingly pricing-out the UK and the EU not finding common ground and the UK moving to WTO trade terms at the start of 2021, which may leave GBP exposed at these levels.
The main focal point of the week, the Jackson Hole Symposium, starts tomorrow with a speech by Fed chair Jerome Powell. Markets have been pricing-in a dovish outlook from Powell who is expected to say that the central bank may allow above-target inflation in order to get the economy on a more secure footing. Further loosening for longer would keep pressure on the US dollar and provide an uplift for GBP/USD.
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GBP/USD trades around 1.3150 and is within 25 pips of printing a weekly high. The supportive short-term uptrend remains in place, and the pair are now back above the 20-dma, another positive driver. Support for GB/USD continues to harden around the 1.3050 zone, if trend support is broken, with further short-term support down to 1.3000. The recent multi-month high at 1.3267 is unlikely to come into play ahead of Jerome Powell’s speech. Likely a quiet session ahead with limited price action.
GBP/USD Daily Price Chart (January – August 26, 2020)
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