GBP/USD forecast - page 26
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Breaking: May's Briefing to Parliament sees British Pound Slip Against Euro, Dollar
Pound Sterling has slipped on Monday as PM Theresa May briefs parliament that she continues to seek full control over UK borders, reigniting expectations for a hard-Brexit outcome to impending negotiations with the EU.
Sterling slipped lower after Prime Minister Theresa May confirmed to lawmakers in the UK parliament that the UK was determined to seek full control of immigration policies in impending Brexit negotiations with the EU.
May was addressing Parliament having met the leaders of the UK's devolved administrations.
The reiteration of May's desire to seek full sovereignty will be taken by markets that the Government remains willing to cede full access to the EU single market, access of which requires the freedom of movement of EU citizens.
The Prime Minister did however confirm that no negotiating positions would be made public ahead of the negotiations - something we see as being sensible; indeed we see a risk that markets are confusing hard-Brexit with hard-bargaining.
The leader of the Scottish Government, Nicola Sturgeon, confirmed May had not divulged any details concerning the UK's position in Monday's meeting between the PM and devolved administrations.
The Prime Minister did however announce that there will be a series of Parliamentary debates on Brexit before and after christmas.
This could keep the Pound supported as it has been shown in the past that Sterling likes the idea of Parliament having a greater say on Brexit negotiations on the assumption that Parliament is inclined to lean towards a softer-Brexit.
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British Pound Suddenly Drops Against Euro, Dollar Ahead of Carney Appearance Before House of Lords
Pound Sterling has taken an expected slump ahead of the appearance of Bank of England Governor Carney before the House of Lords Economic Affairs Committee.
The UK currency has dipped notably agianst the Dollar and Euro in mid-afternoon trade in London.
As of yet there are no clear explanations as to the cause of the decline with the raft of commentators and analysts expressing surprise.
GBP After Carney: The Consolidation Continues
Yesterday, BoE Governor Marc Carney signalled that GBP has become an important driver of the BoE's response function to the economic shock from Brexit. His comments were the clearest indication yet that the MPC worries that the sharp GBP depreciation since the EU referendum will limit its ability to deliver further monetary stimulus.
Indeed, a persistent surge in cost-push inflation in the UK on the back of FX depreciation could stand in the way of any future attempts by the BoE to respond to future economic shocks. GBP has regained some ground after the comments as many saw them as an indication that the BoE will leave policy unchanged at the November IR next week. Further underpinning the GBP is the assumption that the economy will not need another shot of monetary stimulus anytime soon. If that were not the case and the BoE had to ease but were unable to for fear of fuelling inflation, the GBP response would have been negative. Indeed, this would have been the stagflation scenario that Carney is trying to avoid at any cost.
The fear of stagflation can only be positive for GBP when stagflation is only a distant risk. This is why any GBP recovery from here will crucially depend on the quality of the UK data ahead. Absent any significant disappointments from the Q3 GDP print tomorrow, the consolidation may continue.
Needless to say, a stable or even somewhat stronger GBP can help the BoE avoid the stagflation outcome. The Governor thus may continue to talk up the currency at the IR report presentation next week.
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Declines in the Pound Likely to be Temporary say Soc Gen
As Pound Sterling embarks on another sharp move lower we are told that declines a new bold depreciation in the currency is unlikely
The Pound has dipped below 1.12 against the Euro and below 1.22 againt the US Dollar at the time of writing.
The declines are politically inspired and those with an interest in the currency will be wondering whether we are on the brink of another sharp move lower.
While some would say yes, others argue that the worst has passed.
“A fast and imminent continuation of the bearish trend at this stage is unlikely because a lot of UK bearishness is already priced in the exchange rate,” says analyst Olivier Korber at Societe Generale.
“The technical picture suggests a new turbulent range between 1.21 and 1.28, with a real risk to see short-lived spikes in liquidity air pockets below 1.20,” says Korber.
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Harmonic Capital Partners is long GBP, mainly against the EUR it says
British Pound in Holding Pattern Against Euro and Dollar Following Strong GDP Data, Nissan Investment Call
Pound Sterling is stuck in a remarkably tight range as traders continue to sell heavily into any bounces which reflects an ingrained shortage of confidence in the UK's economic outlook.
Sterling jumped after official growth data, which fully ecompasses the period following the EU referendum, confirmed the UK economy hardly batted an eyelid at the vote result.
However, those gains were soon given up and it looks as though the Pound is going to actually close the day lower than where it started against both the Euro and US Dollar.
In fact, the currency is stuck well within recent ranges which implies that it is going to take some kind of hammer-blow to shift it out of the mud:
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GBP: Now's The Time To Position For A Medium-Term Rebound
According to our economists, better-than-expected growth and a weak currency are likely to mean the Bank of England will not announce more easing at its monetary policy meeting on Thursday.
This week, GBPUSD slid to its lowest levels since the UK referendum after the UK’s Chancellor of the Exchequer Philip Hammond warned that political considerations in Europe could force a tough deal with the UK.
We think it is now time to position for a medium-term GBP rebound as a “hard Brexit” scenario is largely priced in.
We recommended a six-month call GBPUSD call spread last week, looking for a long-term recovery from what we view as very cheap levels.
We also see scope for a shorter-term squeeze higher, given stretched short positioning.
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Sell British Pound "on the Bounce" Against Euro and Dollar
Pound Sterling gained temporary ground after the publication of positive reports concerning the UK economy but the gains could not be sustained, even as short-term UK bond yields trended higher.
Sterling jumped after official growth data, which fully ecompasses the period following the EU referendum, confirmed the UK economy hardly batted an eyelid at the vote result.
However, those gains were soon given up and it looks as though the Pound is going to actually close the day lower than where it started against both the Euro and US Dollar.
In fact, the currency is stuck well within recent ranges which implies that it is going to take some kind of hammer-blow to shift it out of the mud
read more