Video: GBPUSD Still Guided by Rate Expectations...Just Further Out
• The timing of the BoE and Fed's first rate hike has dominated GBPUSD's movement over the past year
• An hawkish shift for the BoE led the Pound through its massive rally through July
• With the Fed pulling up even to the BoE, direction is sought in rate forecasts further out the curve
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Rate forecasts have provided the bulk of the Cable's volatility and trend for the past year. However, with the Fed moving into the same hawkish circle as the Bank of England; many traders merely see equilibrium and move on to more obvious contrasts - like EURUSD. Yet, monetary policy forecasts are still a critical driver for GBPUSD especially as the pair has limited affinity for risk trends. However, for this pair, the focus shifts from the timing of the first hike to the pace and breadth the central banks are setting up for out over the next year and beyond. We look at the Cable and its monetary policy jostling in today's Strategy Video.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.