GBP Trading Outlook
The Sterling (GBP) the GBP/USD had its own central bank interest rate meeting overnight and the bank did as forecast holding at 0.5% and increased the Asset purchase program to 375bn vs. 325bn previously to help liquidity and lending in the UK banking sector. GBP/USD was supported near the 1.5500 but the fate with be linked with the EUR/USD which is dragging most majors lower. Also ahead, June UK PMI forecast at -0.2% vs. -0.2% previously. May German Industrial Production is forecast at 0.1% vs. 2.2% previously.
The Sterling (GBP) the GBP/USD fell below 1.5600 as its own risk event weighed with the BOE rate announcement today and expected to result in some form of easing for the UK economy. The EUR/GBP has been very stable in a 0.8000-0.8050 range. Also ahead, ECB Rate Announcement forecast to cut to 0.75% vs. 1% previously. BOE Rate announcement forecast to hold at 0.5%. The BOE Asset Purchase program is forecast to expand to 375bn vs. 325bn previously.
The Sterling (GBP) the GBP/USD was even more stable than the EUR/USD with 1.5700 containing a few attempts higher. The BOE meeting is expected to result in an increase in the Asset Purchase Program by 50bn. UK PMI was lower than expected at 48.2 vs. 53.3 forecast. Also ahead, June EU PMI Services forecast at 50.3 vs. 51.8 previously.
The Sterling (GBP) was barely affected by the EUR/USD selling instead taking advantage on the EUR/GBP to once again test the key 0.8000 level support. The market has ended near 1.5720 highs even though the market is pricing in more QE from the BOE on Thursday which is traditionally bad for the country’s currency. Also ahead, May EU PPI forecast at -0.3% vs. 0.0% previously.
The Sterling (GBP) Cable moved to 1.5700 in line with the stock market moves but lagged behind the EUR/USD with the EUR/GBP recovering some of its recent losses. EUR/GBP moved from below 0.8000 to 0.8080 and could move even higher as the Bank of England is expected to expand their Asset Purchase program when they meet Thursday. Also ahead, June EU Manufacturing PMI forecast at 44.8. Also UK Manufacturing PMI forecast at 46.5 vs. 45.9 previously. Also released, May EU Unemployment Rate forecast at 11.1% vs. 11.0% previously.
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