British Pound: Gains Ground Despite Dovish BoE : The British Pound struggled to hold its ground as manufacturing weakened for the second month in August, and the GBP/USD may continue to give back the rebound from 1.5781 as it breaks out of the upward trending channel carried over from July. As the fundamental outlook for the U.K. deteriorates, the increased risk of a double-dip recession is likely to dampen demands for the sterling, and Pound may face additional headwinds over the near-term as market participants see the Bank of England expanding the asset purchase program beyond the GBP 200B target.
With the BoE interest rate decision on tap for the following week, all of the 15 economists polled by Bloomberg News forecast the MPC to maintain its current policy in September, but market participants may show a bearish reaction to the rate decision as the central bank keeps the door open to expand monetary policy further. In turn, the recent selloff in the GBP/USD looks poised to gather pace in the days ahead, and the exchange rate may make another run at the 200-Day SMA at 1.6114 to test for near-term support.
With the BoE interest rate decision on tap for the following week, all of the 15 economists polled by Bloomberg News forecast the MPC to maintain its current policy in September, but market participants may show a bearish reaction to the rate decision as the central bank keeps the door open to expand monetary policy further. In turn, the recent selloff in the GBP/USD looks poised to gather pace in the days ahead, and the exchange rate may make another run at the 200-Day SMA at 1.6114 to test for near-term support.
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