Tuesday, May 30, 2023

On Alert for Comments from BOE Members


GBP Analysis & News

  • Hawkish comments from BOE members keep GBP supported
  • GBP/USD struggles to keep hold as EUR/GBP looks to break out of descending channel

Despite a tough week for GBP/USD the Pound remains supported by expectations of a more hawkish Bank of England. The lead-up to the August MPC meeting is drawing more attention as markets increase odds that the BOE will start amending its monetary policy to adapt better to current economic conditions.

Michael Saunders was the focus point on Thursday when he mentioned that inflation could prove to be stubbornly high in the coming months, hinting at the possibility of an interest rate in the first half of 2022. Prior to that, Ramsden had made a similar argument regarding the rapid developments since the last forecast was published in May, which had allowed for considerations of tapering sooner than originally expected.

Looking ahead at the UK calendar for next week, we’ll have another BOE member speaking on Monday (Haskel) and then little else until the June retail sales and PMIs are published on Friday.

UK Economic calendar provided by DailyFX

British Pound (GBP) Weekly Forecast: On Alert for Comments from BOE Members

Looking at GBP crosses, GBP/USD is threatening to break below 1.30 if the pair is unable to hold above its 200-DMA (1.3808) going into the new week. The Stochastic is showing a slightly negative bias in the short term but there is still room for a swing upwards towards 1.39, which is proving to be a tough resistance to crack. For EUR/GBP the pressure continues to be tilted to the downside as the pair was nearing the 0.85 mark earlier on in the week as it attempts to consolidate and break out of the descending channel it has been trading in for the last 3 months. A break below this area is likely to lead to a new attempt at breaking below the yearly low seen in April at 0.8472.

GBP/USD Daily Chart & EUR/GBP Weekly Chart

British Pound (GBP) Weekly Forecast: On Alert for Comments from BOE Members

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— Written by Daniela Sabin Hathorn, Market Analyst

Follow Daniela on Twitter @HathornSabin

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