GBP/USD: The 1.36 level is under threat – Westpac
|The Bank of England will have to balance supply chain constraints and surging prices and recovery risks as fiscal responsibility resurfaces. GBP/USD range support at 1.36 may remain under threat, economists at Westpac report.
See: BoE Preview: Forecasts from 10 major banks, looking for clues on tapering timing
UK is encountering acute supply constraints
“Concerns of further supply constraints, shop shortages, and price triggering potential corporate failures (Green Gas has already folded) and household hardships have become a political issue with Govt. stepping in to avert other supply chain issues (notably CO2 supplies to the food industry).”
“How the BoE addresses supporting the post-pandemic recovery, which remains at risk of further lockdowns, and containing price pressures will also have to be balanced against how Chancellor Sunak seeks fiscal responsibility at the Autumn Budget (27th Oct.).”
“GBP has felt the strain of these conflicting issues since mid-Sep. BoE reactions will be critical for GBP/USD as it threatens support within its recent 1.36-1.40 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.