GBP/USD Outlook: Upside seems capped ahead of Scottish elections/BoE on Thursday
The GBP/USD pair staged a solid bounce from the 1.3800 mark, or two-week lows touched on Monday and recovered a major part of the previous session's heavy losses. The strong intraday positive move was sponsored by the emergence of some fresh selling around the US dollar and optimism over a strong economic recovery in the UK, bolstered by the easing of COVID-19 restrictions. In fact, the UK Prime Minister remains on track to go ahead with further restriction loosening and dispense with the one metre-plus social distancing rule on June 21. Regarding international travel, Johnson noted that there will be some opening up on May 17 but added that they need to be as cautious as they can. Read more...
GBP/USD Forecast: Why sterling is down, and when it could turn back up
"Patchy" – is how Jerome Powell, Chair of the Federal Reserve, has described the US economic recovery, pouring some cold water on investors' enthusiasm. He also added that people at the lower end of the income ladder are still struggling with high unemployment levels.
The upswing in the world's largest economy – led by a rapid vaccination campaign and fiscal stimulus – is also running into supply issues. The ISM Manufacturing Purchasing Managers' Index unexpectedly dropped in April, mostly due to price rises and delays in shipments. While these are "good problems" to have – rather than lack of demand – markets are more cautious and money is flowing to the safe-haven dollar. Read more...
GBP/USD flirts with session lows, just above mid-1.3800s amid broad-based USD strength
The GBP/USD pair maintained its offered tone through the mid-European session and was last seen hovering near the lower end of its daily trading range, just above mid-1.3800s.
The pair met with some fresh supply on Tuesday and eroded a part of the previous day's strong rally of around 130 pips from the 1.3800 mark, or two-week tops. As investors looked past the disappointing release of US ISM Manufacturing PMI on Monday, the US dollar regained positive traction and was seen as a key factor exerting downward pressure on the GBP/USD pair. Read more...
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