GBP/USD: BoE hawkishness and upbeat mood to turn cable up

GBP/USD has been under pressure as a petrol shortage threatens the UK. However, the Bank of England’s hawkishness, optimism about Evergrande and US data could turn the pair around, according to FXStreet’s Analyst Yohay Elam.

The pound has room to recover

“The UK Petrol Retailers Association has said 50-90% of stations are running dry in some areas, and the crisis may derail the recovery. The longer the crisis lasts, the greater the pressure on the pound.”

“The ‘Old Lady’ hinted that interest rates could rise even before the BoE completes its bond-buying scheme. Moreover, two members voted to cut short debt purchases already now after consumer prices rose more than estimates. Annual inflation hit 3.2% in August.” 

“The greenback has room to fall as the Evergande crisis seems to be under control. While China's behemoth construction company is set to miss more debt payments, investors are less worried about the risks of contagion.”

“US Durable Goods Orders are due later on Monday and are projected to show an increase in investment. While employment statistics disappointed last month, retail sales were robust. Upbeat figures could weigh on the safe-haven dollar, especially as the Fed decision is already out of the way.”