GBP price, news and analysis:
- GBP/USD is under modest downward pressure in early London trade Thursday but its trend higher remains intact and further gains are still likely.
- The US remains the main driver of the pair, with USD weakened by a dovish Fed, the prospect of more free money and a benign inflation outlook.
GBP/USD strength persists
GBP/USD is modestly lower in early London trading Thursday but, as the chart below shows, it continues to trend higher and further gains are likely in the days ahead.
GBP/USD Price Chart, One Hour Timeframe (February 4-11, 2021)
Source: IG (You can click on it for a larger image)
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For the time being, developments in the US are driving the pair, as the Federal Reserve remains dovish and is expected to inject still more money into the economy. Moreover, with US inflation still benign, the prospect of the Fed having to change its stance and think about tightening monetary policy remains remote.
of clients are net long.
of clients are net short.
Note though that GBP has been firm independently since last September now a no-deal Brexit has been avoided and the UK continues to press ahead with its coronavirus vaccine program. That can be seen in the chart below of its trade-weighted index.
GBP Price Chart, Daily Timeframe (January 14, 2020 – February 11, 2021)
Source: Bank of England
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— Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex