Despite the Bank of England’s surprise dovishness, sharper inflation rises, labour stability post furlough and reduced tensions with the EU are supporting recently vulnerable GBP/USD. Economists at Westpac expect cable to hold above the 1.3250-1.3300 support area.
“Firmer UK data has led to an unwinding of much of the moves seen in UK short rates after the BoE’s surprising lack of policy action in October. This week’s October inflation data provided another surprise for markets with a sharper lift in both PPI and CPI than anticipated. Critical will be how consumers react and whether recently disappointing retail sales pick up into the festive season.”
“The UK had been experiencing higher covid cases than Europe, but UK cases appear to have plateaued. At the same time, EU/UK discussions appear to be in a less precarious state. Both factors should allow GBP to carve out support against USD while it pushes into new ranges against EUR.”
“Though GBP/USD may struggle to regain levels above 1.3550, it should now find solid support in the 1.3250-1.3300 area.”
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72.72% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2022 Teletrade-DJ International Consulting Ltd
Teletrade-DJ International Consulting Ltd is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.