GBP Trading Outlook
The Sterling (GBP) struggled in the risk off environment falling below 1.5950 in the European session before returning to the 1.6000 level by the end of the US session. The BOE met and held rates at 0.5% and kept their asset purchase program at 375bn as widely forecast. Looking ahead, German October CPI forecast at 0% m/m. Also UK September Trade Balance forecast at -8.9bn vs. -9.84bn previously.
The Sterling (GBP) held up well finding support under 1.6000 and via EUR/GBP selling which is down below 0.8000 now. The upcoming BOE meeting where rates are forecast to be held at 0.5% also have a chance to increase UK Asset Purchase Program. The chance of more QE is put at 40% so there will be volatility after the announcement one way or another. Looking ahead, ECB Rate Meeting forecast to hold at 1.0% with Press Conference after. BOE Rate meeting with forecast to hold at 0.5% and Asset Purchases held at 375bn.
The Sterling (GBP) GBP/USD has been extremely volatile with sellers pushing the major below 1.6000 but we have surged back above the round figure in Asia today as the Dollar is sold across the board. GBP/USD will follow the EUR/USD while the EUR/GBP is locked at 0.8000. Looking ahead, German Industrial Orders forecast at -0.5% m/m.
The Sterling (GBP) GBP/USD was pushed back below 1.6000 after UK Services PMI fell to 50.6 vs. 52 previously. EUR/GBP pivoted the 0.8000 level with the GBP and Euro losses roughly at the same pace. There is some focus on who will replace the BOE Governor King and whether they will affect the monetary policy and Asset purchase program. Looking ahead, UK September Industrial Output forecast at -0.6% vs. -0.5%. EU October PMI Services forecast at 46.2.
The Sterling (GBP) GBP/USD fell back to 1.6000 but has held above the level so far with EUR/GBP selling helping to support. The EUR/USD sell off has left all the majors under pressure and if the selling continues this week then the GBP/USD could be dragged into a downtrend with the single currency. Looking ahead, October PMI Services forecast at 52 vs. 52.2 previously.
Go to The Sterling (GBP) Archive