British Pound (GBP) Price Outlook: GBP/USD Stabilizing on Evergrande Relief
GBP price, news and analysis:
- The embattled Chinese property company Evergrande’s main unit, Hengda Real Estate, has said it will make a bond interest payment Thursday after private negotiations with bondholders.
- That has eased fears of widespread market disruption, and boosted riskier assets such as stocks and currencies like the British Pound, despite concerns that Evergrande could still default on its debts.
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GBP/USD steadier on Evergrande news
GBP/USD is steadier in early European business Wednesday on relief that China’s indebted property developer Evergrande has reached agreement on some interest payments and the People’s Bank of China has injected more money into the country’s banking system.
GBP/USD Price Chart, Four-Hour Timeframe (July 15 – September 22, 2021)
Source: IG (You can click on it for a larger image)
Federal Reserve policy decision ahead
Where GBP/USD goes next will depend largely on Wednesday’s decisions on monetary policy by the Federal Reserve. The Fed is expected to signal that it will scale back its asset buying later this year amid growing pressure to increase interest rates in 2022. If such a statement is not forthcoming, USD will likely fall back, benefiting currencies like GBP.
On the domestic front, GBP might also benefit from news that the UK is exploring joining the US, Mexico, Canada (USMCA) free-trade agreement. Thursday’s announcement by the Bank of England’s monetary policy committee is unlikely to be a market mover as little is expected from it.
--- 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.