Markets

GBP/USD Daily Fundamental Forecast – September 12, 2017

The pound continued to be one of the strongest currencies around, a trend that we have been seeing since the middle of last week. It was the same case yesterday as well though it fell against the dollar. The dollar managed to recover all across the board during the course of the day yesterday but its recovery was the least against the pound which lost only around 30 pips or so, showing the underlying strength in the GBPUSD pair.

GBPUSD Holds Strong Despite Dollar Strength

It is likely to be an important week for the pound as the focus will be on the BOE for this week. The BOE had been dovish in its announcement and statement last month as it did not have many backers for a rate hike anytime soon. This is understandable as there are several processes that are not yet clear as far as the Brexit is concerned and it is likely that it would take atleast 6 months or so for things to become fully clear. The BOE does not want to take any drastic action in the meantime and increase the uncertainty even more.

But this feeling does not stop the BOE members from voting for a rate hike and we believe that the hawkish members from the BOE will continue to vote for a rate hike and the BOE might try and sound hawkish this time understating the fact that they would act if the situation warrants so. This is also something that a part of the market expects to happen and that is why we are seeing the GBPUSD pair continue to trade near the highs of its range and continuing to remain strong despite the strength in the dollar.

Looking ahead to the rest of the day, we have the CPI data from the UK scheduled to be released during the London session and this is likely to give a glimpse into how the UK economy is doing and whether it would provide enough fuel for the BOE to be hawkish. We should see the GBPUSD continuing to trade in a strong manner during the course of the day.

This article was originally posted on FX Empire

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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