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
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
Gold
Bearish
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • S&P 500 on the verge of getting separation from March trend-line. Nasdaq 100 below March trend-line, triggering H&S pattern. Get your #equities market update from @PaulRobinsonFX here:https://t.co/quhMgBpoiq https://t.co/n0jtTnVNwl
  • Japanese Gov't recommends 2-week extension of Tokyo virus emergency - BBG $JPY
  • While the rise in yields is weighing on risk trends, carry trade didn't seem to take the hit. In fact, the charge in US yields seems to have far outweighed the de-risking from $USDJPY's perspective: https://t.co/KpOpgopOep
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇨🇦CAD: -0.09% 🇬🇧GBP: -0.40% 🇦🇺AUD: -0.69% 🇳🇿NZD: -0.81% 🇯🇵JPY: -0.90% 🇨🇭CHF: -0.97% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/8Tvotykz9y
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.33% Gold: -0.69% Silver: -2.64% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/faJTbi16VK
  • AUD/USD now off daily lows, remains much weaker as a result of broad US Dollar strength $AUDUSD https://t.co/OkdKWbepAR
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 93.13%, while traders in GBP/JPY are at opposite extremes with 70.14%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/XXOjh5LmaB
  • Silver price action stalls between Moving Averages. Platinum prices currently confined by Fibonacci Support. Get your market update from @Tams707 here:https://t.co/Nbl8FDmfps https://t.co/VyuZzP8w2q
  • US Markets at the Close $NDX 12464.0 -1.73% $SPX 3768.49 -1.34% $DJI 30924.14 -1.11%
  • USD/JPY stronger during trade, now pushing towards 108 level $USDJPY https://t.co/GemouFGvHF
British Pound (GBP) Latest: GBP/USD Outperforms, EUR/GBP Remains Bearish

British Pound (GBP) Latest: GBP/USD Outperforms, EUR/GBP Remains Bearish

Justin McQueen, Analyst

GBP/USD, EUR/GBP Price Analysis & News

  • GBP Marginally Outperforms on Equity Recovery
  • EUR/GBP Bias to Fade Rallies Remains

GBP Marginally Outperforms on Equity Recovery

Marginal outperformance in the Pound this morning, as the currency tracks the rebound in risk appetite. Alongside this, the well-documented success in the UK’s vaccine rollout program has also played its part in underpinning the currency, particularly against the Euro. That said, aside from the fluctuations in risk sentiment, the main focus for GBP will be on the Bank of England monetary policy report. Since the last MPR back in November, the short term outlook has changed noticeably with the UK in its third lockdown. However, while growth projections are like to be cut on the short horizon, the MPC have acknowledged the diminishing impact lockdowns have had on economic activity.

GBP Forecast
GBP Forecast
Recommended by Justin McQueen
Download our fresh Q1 2021Pound Forecast
Get My Guide

Although, perhaps what will garner the most attention will be the BoE’s review of negative interest rates. In turn, the central bank may well find that negative rates are operationally feasible, however, this does not necessarily mean that the central bank will go down this root with Governor Baily himself noting that NIRP is a controversial issue. For now, adjusting asset purchases is the BoE’s main reaction function with OIS markets pushing out the likelihood of negative rates until 2022. My view is that negative rates is very unlikely and will only go down this root as a last resort.

Negative Interest Rates - Can They Stimulate The Economy?

Taking a look at volatility markets, GBP/USD implied vols are slightly firmer, reflecting the upcoming risk event. Although, vols are not showing a notably heightened risk for the Pound, while risk-reversals are also showing a slight premium for calls on the 1-week tenor, which is in line with the recent GBP trend.

FX Volatility Matrix

British Pound (GBP) Latest: GBP/USD Outperforms, EUR/GBP Remains Bearish

Source: Refinitiv, DailyFX

EUR/GBP Bias to Fade Rallies Remains

The EUR/GBP outlook remains bearish as bounce-backs continue to be faded. Last week, the ECB stepped up its rhetoric against the Euro, while vaccine disruptions has also reduced the appeal of the Euro. Alongside this, with speculative positioning heavily long the Euro, liquidation risks bode well for further EUR/GBP downside. That said, with equity markets at risk of continued bouts of de-leveraging, EUR/GBP will likely be susceptible for brief bounce-backs and thus allowing for the cross to be faded. Topside resistance situated at 0.8860 and 0.8900-15.

EUR/GBP Chart: Daily Time Frame

British Pound (GBP) Latest: GBP/USD Outperforms, EUR/GBP Remains Bearish

Source: Refinitiv

EUR/GBP MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 5% -6% 0%
Weekly 3% 14% 7%
What does it mean for price action?
Get My Guide

Find out more ontrading GBP with our comprehensive guide

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

DISCLOSURES