- GBP/USD’s upward pressure towards 1.3670 fades as the US session begins.
- Overall, US dollar strength across the board limited the move towards 1.3700.
- BoE members expressed concerns about inflation, likely could raise rates sooner than expected.
GBP/USD is nearing last week’s highs around 1.3657, trading at 1.3633, up 0.10% during the New York session at the time of writing. The market mood is upbeat, as evidenced by European and U.S. stock indexes posting gains. The exception are the German DAX and the Spanish IBEX 35, which each lost 0.12% and 0.68%.
GBP/USD remains at 94.19 as the U.S. dollar index measures the greenback’s performance against six peers.
Earlier in the Asian session, sterling hit a weekly high of around 1.3670. The Bank of England (BoE) made remarks over the weekend that triggered that move upward.
In an interview with the Yorkshire Post, Andrew Bailey, Governor of the Bank of England, said he was concerned that prices accelerated above the central bank’s 2% target, and described inflation as potentially “very damaging”. According to Bailey, “we [the BoE] have to, in a sense, prevent inflation from becoming permanently ingrained.”.
According to Michael Saunders, a member of the Monetary Policy Committee (MPC), markets are pricing in an earlier interest rate hike than expected as inflation accelerates.
Meanwhile, on the other hand, Goldman Sachs cut the U.S. growth forecast for this year and 2022, blaming the lag on consumer spending. Bank of America said they now expect 5.6% annual growth, down from 5.7%, and 4% in 2022, down from 4.4%.
Macroeconomically, the UK is expecting growth of 3.2% for NIESR (3M) GDP in September. Elsewhere, the U.S. is in observation of Columbus Day.
Today’s Last Price 1.3633
Daily Rate 0.0018
Today’s Daily Rate % 0.13
Daily Open 1.3615
20 Daily SMA 1.3656
50 Daily SMA 1.3743
100 Daily SMA 1.3845
SMA of 200 Daily 1.3844