- GBP / USD fails to stay above 1.3600 and falls back towards 1.3550.
- Upcoming speeches by BoE and Fed members will be watched.
The GBP/USD it has retraced from session highs previously touched modestly above 1.3600 and is now trading above 1.3550, lateralized for the day, although still up around 0.5% on the week. The pair’s strong rejection from 1.3600, which also coincides with resistance in the form of last Tuesday’s lows just above it, suggests that this week’s technical correction may have run its course. Remember that GBP / USD saw a sharp decline last week after the Bank of England surprised markets by choosing not to raise interest rates by 15 basis points as expected.
Fed and BoE updates
Bank of England Governor Andrew Bailey spoke publicly on politics on Monday, reiterating his stance at the last meeting that rate hikes could be appropriate in the coming months if the economy, especially the labor market, evolves as Was expected. He is scheduled to speak again on Tuesday at 16:00 GMT, although his remarks may not address Bank of England policy as the topic of the panel discussion is inequality. However, Bank of England Monetary Policy Committee member Ben Broadbent is scheduled to speak at 15:30 GMT and his remarks could be more pertinent given that he is speaking about the labor shortage before the UK parliament. United.
GBP / USD traders will also need to keep an eye out for developments / statements from the Fed on Tuesday. Recently it emerged that Fed Governor Lael Brainard was interviewed for the position of Fed Chairman and is considered a “contender” for the position. This follows Braindard and current Fed Chairman Jerome Powell being seen at the White House last week. The markets see the situation as a two-horse race, and Powell remains the frontrunner to be re-elected as Fed chairman, although his perceived “edge” has diminished in recent days. Brainard is considered more dovish than Powell and her nomination as Fed chair would weigh on the US dollar.
Dovish comments from Fed Vice Chairman Richard Clarida and FOMC member Charles Evans on Monday were cited as one of the reasons the US dollar weakened at the time (and GBP / USD was able to rally by above 1.3500). Neither saw the conditions for rate hikes met in mid-2022 as the USD STIR markets are trading. Currency markets will be on the lookout for comments from FOMC members Daly and Kashkari at 4:35 PM and 6:30 PM respectively in the wake of the newly released October IPP report (annual IPP rates are still very elevated).
.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
