GBP/USD: At the lower end of the 1.2725/1.3200 range – Westpac
|Decisive and coordinated policy action from BoE and Government should provide GBP with support, but the prospect of further EU/UK post-Brexit talks should cap the pound, according to economists at Westpac Institutional Bank.
Key quotes
“The first dose came from an inter-meeting BoE 50bps cut of its core Bank Rate back down to the post-Brexit vote ‘insurance’ low of 0.25% seen in 2016.”
“The second dose came from an expansionary budget that included up to GBP30bn of spending to support public services. Such pressures are unlikely to be restricted to the UK and so the initial impact on GBP has been overshadowed by global asset shifts.”
“The compression of global rates towards zero may cause markets to asses the scale of policy support provided to economies. This could favour GBP.”
“With post-Brexit negotiations next week likely cause some concern, GBP/USD may remain at the lower end of its recent 1.2725-1.3200 range.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.