GBP/USD to take a peek at the 1.4345-1.4377 zone – DBS Bank
|GBP is ratcheting higher, driven by favourable macro settings and the latest hawkish tone from BoE policymaker Gertijan Vlieghe. As cable flirts with the late-February highs of 1.4237, economists at DBS Bank expect GBP/USD to extend its advance towards the 1.4345-1.4377 region.
A suite of positive factors has underpinned GBP
“The 6 May Bank of England (BoE) policy meeting provided a policy taper lift-off, and last week’s (ended 28 May) hawkish comments from BOE policymaker Gertijan Vlieghe has further fuelled GBP short covering. Vlieghe’s comments of a possible earlier rate hike were read as significant, given he is noted to be a frontrunner to replace BOE chief economist Andy Haldane, whose term expires in June. It appears as a strong testament of the BoE’s growing confidence over the UK’s economic outlook.”
“GBP has benefited from UK’s COVID-19 reopening by its virtue as a vaccination leader, having skipped the threat of a Scottish independence referendum, and with UK May composite PMI rising to 62.0 to register the fastest output growth on record.”
“While there is scope to bring lower GBP’s speculative length, we note the significance of the break of the key 1.4005 resistance pivot which previously held and retarded four attempts. A spillover 1.4237 increases upside pressure for a likely peep into 1.4345- 1.4377, which is the prior double top zone sighted in January and April 2018, respectively.”
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.