GBP/USD: Sterling to fight back the considerable dollar strength

The GBP/USD pair has been succumbing to a yields-driven dollar rally and has dipped under 1.36. The main event of the day and the week is the Bank of England's "Super Thursday." The BoE is expected to abandon its thoughts about setting negative rates, boosting sterling, FXStreet’s Analyst Yohay Elam briefs. 

See – Bank of England Preview: Forecast from seven major banks

Key quotes

“While President Joe Biden continues negotiating with moderates in both parties, House Democrats passed another hurdle en route to passing a large stimulus bill without Republican support. While the White House is unlikely to get its desired $1.9 trillion stimulus bill, it will likely be higher than expected. Apart from the economic boost, it means more debt issuance prompting a sell-off of US debt.” 

“Apart from probably leaving its policy unchanged, the B0E publishes its Monetary Policy Report. Will the bank upgrade its forecast given Britain's robust vaccination campaign? Apart from ramping up immunization, coronavirus cases and hospitalizations have extended their decline. On the other hand, the recent lockdown – and Brexit – may have weighed on the economy.” 

“Sterling traders will watch Governor Andrew Bailey's comments on negative interest rates. The BoE is set to conclude its review and may put an end to speculation about setting sub-zero borrowing costs – a specter that has been weighing on the pound.” 

“Support awaits at 1.3570, the daily low, followed by 1.3530, a swing low in mid-January. Some resistance awaits at 1.3610, the previous trough, followed by 1.3680, a peak earlier in the week.”