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British Pound (GBP) Price Outlook: GBP/USD Up Modestly as Haldane Hints at Tapering

British Pound (GBP) Price Outlook: GBP/USD Up Modestly as Haldane Hints at Tapering

Martin Essex, MSTA, Analyst

GBP price, news and analysis:

  • Bank of England Chief Economist Andy Haldane says it might at some stage be time to reduce the central bank’s huge monetary stimulus program introduced to help the UK economy recover from the contraction caused by the coronavirus pandemic.
  • There was only a modest rise in GBP/USD after his comments hit the wires but they are still positive for the pair, improving the outlook albeit marginally.
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GBP/USD outlook improves on Haldane comments

The outlook for GBP/USD has improved modestly after Bank of England Chief Economist Andy Haldane suggested Wednesday that the central bank might be closer to tapering its monetary stimulus program than thought previously.

In a radio interview, Haldane said there were already some “pretty punchy pressures on prices”, adding that the UK central bank “could start tightening the tap on that, slowing down the amount of money were printing, and ultimately perhaps even starting to turn that around.”

GBP/USD edged ahead on Haldane’s comments before easing back as traders realized that Haldane is due to leave the BoE later this month and is generally seen as hawkish anyway, having voted last month to reduce the size of the Bank’s bond-buying program.

Still, his comments are positive for GBP/USD, albeit it is unlikely to break out of its recent relatively narrow trading range.

GBP/USD Price Chart, 15-Minute Timeframe (June 1-9, 2021)

British Pound (GBP) Price Outlook: GBP/USD Up Modestly as Haldane Hints at Tapering

Source: IG (You can click on it for a larger image)

As for the near-term outlook, traders will be keeping an eye open for a possible delay in the planned lifting of coronavirus restrictions in the UK later this month and also for a possible escalation of the row between the EU and the UK over trade between Great Britain and Northern Ireland.

--- Written by Martin Essex, Analyst

Feel free to contact me on Twitter @MartinSEssex

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

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