GBP price, news and analysis:
- GBP is looking strong all round after Andrew Bailey, Governor of the Bank of England, warned Monday of the possibility of rising inflation as the UK recovers from the economic damage caused by the coronavirus pandemic.
- Even though he added that the BoE would not raise interest rates until clear evidence emerged that inflation would be sustainable at the 2% target level, his comments will likely keep the Pound on an upward track for some time yet.
GBP/USD strength may persist
GBP is looking firm all round Tuesday, holding its ground against USD and gaining against its major competitors, and that advance could well continue after Monday’s warning from Bank of England Governor Andrew Bailey of rising UK inflation, although he added that this would not necessarily persuade the BoE to increase UK interest rates.
Even against a broadly higher USD, GBP looks like recovering after the losses recorded by GBP/USD over the past two weeks.
GBP/USD Price Chart, One-Hour Timeframe (February 23 – March 9, 2021)
Source: IG (You can click on it for a larger image)
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Live now:
Mar 09
( 10:03 GMT )
Recommended by Martin Essex, MSTA
Trading Sentiment
Sterling’s underlying strength, however, is more obvious against currencies like the Euro, with EUR/GBP still in the deep downtrend that began late last year.
Source: IG (You can click on it for a larger image)
Note that while USD is currently the currency of choice thanks to increasing US Treasury yields, UK government bond yields have also risen sharply, with the yield on the 10-year Gilt up from 0.156% in early January to the current 0.741%.
| Change in | Longs | Shorts | OI |
| Daily | 6% | -4% | 1% |
| Weekly | 9% | -16% | -4% |
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— Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
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