GBP/USD Forecast: Will bears stay on sidelines amid BoE speculation?
GBP/USD has erased a large portion of its daily losses after having touched a new all-time low of 1.0340 in the early Asian session. The pair was last seen edging higher toward 1.0800 and bears could stay on the sidelines for the now while trying to figure out whether or not the Bank of England (BoE) will take action to stop the British pound's devaluation.
The UK's government's "mini-budget," which includes massive unfunded tax cuts, triggered a relentless GBP selloff ahead of the weekend. Investors grow increasingly worried over fiscal measures further fueling consumer inflation in the UK and higher public borrowing putting the economy on an unsustainable debt path. Additionally, fiscal measures are having the opposite effect of what the BoE is trying to do with regard to raming inflation. Read more...
GBP/USD outlook: Cable hits record low and eyes parity, as conditions continue to worsen
British pound fell to a record low vs dollar in Asian session on Monday, in extension of last Friday’s sharp fall, when the pair was down 3.6% for the day in the biggest daily drop since 10 Nov 2021.
Cable spiked through 1985 low at 1.0520 to hit new all-time low at 1.0348, deflated by strong risk aversion on growing uncertainty and signals that the Fed will remain in strong hawkish mode, while confidence in Britain’s plan to stabilize the economy by lowering taxes and increasing borrowing, started to fade, adding to prevailing negative sentiment. Read more...
GBP/USD recovers further from all-time low and climbs to 1.0700, not out of the woods yet
The GBP/USD pair manages to recover a major part of its early lost ground to an all-time low and moves back to the 1.0700 mark during the first half of the European session. The attempted recovery, however, lacks follow-through buying and runs the risk of fizzling out rather quickly.
Speculations that the Bank of England will have to step in to stabilise the domestic currency helped the British pound to stall its free-fall following the new UK government's mini-budget on Friday. This, in turn, is leadsing to an intraday US dollar profit-taking slide from a fresh two-decade high, which further contributes to the GBP/USD pair's intraday recovery of over 400 pips from the 1.0330 area. Read more...
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