GBP/USD will test its historical value around 1.0350 despite urgent bond buying by the BOE – BBH

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Sterling underperforms again despite Bank of England (BoE) emergency bond buying plans. The BBH economists expect the pair GBP/USD test the low of 1.0350.

The BOE will make temporary purchases of long-term bonds

“The BoE noted that to achieve its objective of maintaining financial stability, “the Bank will carry out temporary purchases of long-term UK government bonds from September 28. The purpose of these purchases will be to restore orderly market conditions.”

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“However, neither the rate hike nor the emergency bond purchase plan has done anything for sterling. Market confidence, once lost, is always difficult to regain.”

“We look forward to an eventual test of this week’s new record low near 1.0350.”

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Source: Fx Street

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