GBP/USD: Sterling to rally if BoE ends emergency programme of gilt purchases – Commerzbank

FXStreet Insights Team FXStreet

Sterling has been able to retrace its losses recorded following the budget debacle. Bank of England’s (BoE) decision on the end of the emergency programme of gilt purchases is key to the future of the currency, economists at Commerzbank report.

BoE not made any gilt purchases, a positive sign for sterling

“Yesterday, the BoE even announced that it had not made any purchases as part of its emergency programme initiated as a result of the sell-off last week. By doing so it seems to want to signal that it wants to intervene as little as possible to calm the gilt market. This, for now, is a positive sign for sterling.”

“What is going to be even more interesting is whether the central bankers really will end the programme on 14th October as announced. If the BoE will end the purchases as planned sterling might benefit significantly, as the bank would hereby signal that it is sticking to its restrictive path. If, on the other hand, it was to continue the programme for fear of a renewed rise in long-term market rates sterling exchange rates are likely to go south again.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD remains offered below 1.3600

GBP/USD resumes its decline, reversing Tuesday’s bullish attempt and breaking below 1.3600 the figure on Wednesday. Cable’s marked pullback follows a firm advance in the Greenback as investors continue to assess latest US data as well as the geopolitical landscape.

EUR/USD remains on the back foot around 1.1650

EUR/USD comes under renewed selling interest, slipping back to the mid-1.1600s ahead of the opening bell in Asia. Spot loses momentum on the back of solid gains in the US Dollar in a context of unabated geopolitical tensions and steady caution ahead of key US data releases and Chair Warsh’s speech at the Jackson Hole Symposium on Friday. Looking ahead, the ECB will publish its Accounts on Thursday.

Gold puts $4,600 to the test amid USD gains

Gold now faces some renewed downside pressure and seems to challenge the key $4,600 mark per troy ounce on Wednesday. That said, the yellow metal’s correction comes after three daily upticks in a row, fading at the same time the recent move to fresh tops around $4,700. The stronger US Dollar and a decent rebound in US Treasury yields across the curve continue to weigh on bullion.

Bitcoin vs Gold Price Prediction: Rally cools as US PCE inflation holds steady

Bitcoin (BTC) is edging lower, trading slightly above $78,000 on Wednesday. This correction comes after last week’s rally and the subsequent rejection around $81,000. The decline reflects cooling sentiment amid overheated market conditions and increased profit-taking.

Nvidia: How will the company perform as its switches from a chip maker to an AI finance house?

The main event for markets this week takes place this evening, after US markets close. Nvidia, the AI giant, will report results for last quarter. Another monster report is expected. Revenues could come in above $92bn, and earnings per share could come in at $2.09.

Kevin Warsh’s Jackson Hole dilemma: Say too much, too little, or just enough

Kevin Warsh is preparing to deliver his first Jackson Hole speech as Federal Reserve (Fed) Chair on Friday, and expectations extend well beyond whether interest rates will be raised or left unchanged in September.