4 Sep 2015
GBP/USD slides to fresh 4-month lows and rebounds
FXStreet (Córdoba) - The pound continues to decline against the US dollar as it had been the case during the last two weeks. GBP/USD printed a fresh low at 1.5165 and then rebounded, recovering toward 1.5200.
The pair moved with a downside bias all day and broke below 1.5200 after the US employment report. After making a pause for a few minutes, resumed the decline and fell to fresh lows.
GBP/USD decline unstoppable
Since August 23 cable has fallen 600 pips and is now headed toward the lowest weekly close since late April. Less than two weeks ago the pair approached 2015 highs before turning sharply to the downside.
Today is falling also versus the euro and the Swiss franc but on a weekly basis is standing near the levels it had a week ago.
Next week: BoE
The pound started to underperform after Bank of England (BoE) staff reduced expectation of a rate hike. Next Thursday, the BoE will announce its decision and also the minutes of the meeting that should impact on the pound, depending of the outlook and the vote of the Monetary Policy Committee.
According to analysts from Rabobank, the BoE has its opportunity to lay out how deeply it is concerned about the threat stemming from slower emerging market growth. “We expect that the MPC voting pattern will remain the same as August with just McCafferty expressing a preference for an immediate rate hike. As policy-makers evaluate the impact of slower growth in emerging market we see less risk of more hawks voting alongside McCafferty in the coming months.”
Rabobank forecasts that the first rate hike may come in May but warns that “currently there are risks of a later start to policy tightening.”
The pair moved with a downside bias all day and broke below 1.5200 after the US employment report. After making a pause for a few minutes, resumed the decline and fell to fresh lows.
GBP/USD decline unstoppable
Since August 23 cable has fallen 600 pips and is now headed toward the lowest weekly close since late April. Less than two weeks ago the pair approached 2015 highs before turning sharply to the downside.
Today is falling also versus the euro and the Swiss franc but on a weekly basis is standing near the levels it had a week ago.
Next week: BoE
The pound started to underperform after Bank of England (BoE) staff reduced expectation of a rate hike. Next Thursday, the BoE will announce its decision and also the minutes of the meeting that should impact on the pound, depending of the outlook and the vote of the Monetary Policy Committee.
According to analysts from Rabobank, the BoE has its opportunity to lay out how deeply it is concerned about the threat stemming from slower emerging market growth. “We expect that the MPC voting pattern will remain the same as August with just McCafferty expressing a preference for an immediate rate hike. As policy-makers evaluate the impact of slower growth in emerging market we see less risk of more hawks voting alongside McCafferty in the coming months.”
Rabobank forecasts that the first rate hike may come in May but warns that “currently there are risks of a later start to policy tightening.”