GBP Trading Outlook
The Sterling (GBP) the GBP/USD rallied with the Euro pre Draghi and the BOE did as expected leaving interest rates at 0.5% and Asset purchase program at 375bn. EUR/GBP spiked to 0.7900 but finished back below 0.7850 as the Euro was sold heavily in the US session. Looking ahead, July EU PMI Services forecast at 47.6 vs. 47.6 previously. Also ahead, UK PMI services forecast a t51.5 vs. 51.3 previously.
The Sterling (GBP) GBP/USD fell back to 1.5600 after very weak housing data and manufacturing PMI overnight. The July UK manufacturing PMI came in at 45.4 vs. 48.4 previously. The GBP/USD and EUR/GBP will both be in play tonight at the BOE & ECB meeting. Looking ahead, Bank of England Rate meeting forecast to hold rates at 0.5% and keep their Asset Purchase Program at 375bn. Also ECB Rate meeting forecast to hold at 0.75% but all attention on the Press Conference held afterwards and what Draghi can deliver.
The Sterling (GBP) the GBP/USD fell from 1.5700 to lower 1.5600 after Moody’s reaffirmed its negative outlook on the UK credit rating. The EUR/GBP took advantage to rally up to 0.7850 and is in danger of a trend reversal after falling from 0.8500 to 0.7800. The FOMC and ECB are both going to be major events for the GBP and traders expect range trading. Looking ahead, July Nationwide House Prices forecast 0.0% vs. -0.6%. Also July UK PMI Manufacturing 48.5 vs. 48.6 previously. July EU PMI Manufacturing is forecast at 44.1 vs. 44.1 previously.
The Sterling (GBP) the GBP/USD tested above 1.5750 a few times on Friday but each time we had solid resistance and the market is now ranging between 1.5700 and 1.5750 waiting for further news from the ECB and US FED. The UK itself has embarked of a very loose monetary policy with 0.5% interest rates and very large asset purchase program currently at 325bn Pounds. Looking ahead, July UK Halifax forecast at -0.5% vs. 1% previously. July UK CBI Distributive Trades forecast at 15 vs. 42 previously.
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