The fundamental analysis of today’s GBPUSD shows that GBPUSD’s resumption attempts continue to face strong resistance near 1.2825. That is leaving the situation in a downward consolidation phase above the 1.28 level, while the dust settles on the Bank of England (BOE) decision after the fact.
08 November 2019, AtoZMarkets – The primary catalyst behind Cable’s downward spiral the day before was the reversal of the trend observed in the announcement of the BOE’s monetary policy. Rates reached their lowest level since 24 September at 1.2793. After the BOE MPC maintained the interest rates. But two members of the MPC voted for lower rates.
GBPUSD Fundamental Analysis – 08 November 2019
The prudent remarks of BOE Governor Carney also exacerbated the pain in the pound. Governor Carney, in his subsequent speech, highlighted the risks of a global economic slowdown. And he warned that a Brexit without a deal would likely result in job losses and business closures.
Meanwhile, the trade deal between the US and China, hopes were based on the market’s risk profile. That triggered a massive upswing in Treasury yields, pushing the US dollar higher in general. As a result, the Cable has also been under pressure by rising generalized demand for the greenback.
The focus will remain on trade-related developments. And the dynamics of the dollar in the context of empty data in the UK. British political headlines will be relegated to the background, with increasing expectations from the BOE. In addition, it should be noted that preliminary data on the Michigan consumer confidence index in the United Kingdom, for trades in current dollars.
The US And China Trade Tariffs
The US and China have agreed to cancel their trade tariffs. This raises the hope that both sides will sign a trade agreement in the coming months. Dollar rose against the euro and the pound sterling after comments from the European Commission. And the Bank of England pointed to weak growth prospects in Europe.
Uncertainty Over Brexit
Elsewhere, the pound fell after the Bank of England cut its growth forecast, expecting the United Kingdom to grow at half the pace of 2018 due to slower global growth and prolonged uncertainty on Brexit. The bank also hinted that it could soon lower interest rates if this uncertainty continues to depress output.
Monetary policy may have to reinforce the expected recovery in UK GDP and inflation growth, If global growth fails to stabilize or Brexit’s uncertainties outlast well entrenched, the bank said, after leaving interest rates unchanged at 0.75%. Two policymakers disagreed with the decision, calling for immediate rate cuts.
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