1/18/2021 4:06:28 PM GMT | By Joel Frank
GBP/USD has recovered from early European morning session lows and now trades comfortably back above the 1.3550 level.
The pair has been primarily focused on the USD dynamics so far on Monday.
GBP traders will watch December inflation, retail sales and January flash PMIs this week.
GBP/USD has seen a gradual recovery from early European morning session lows at 1.3520 and now trades comfortably back above the 1.3550 level, though is still down by around 0.1% or around 10 pips. Volumes have dropped off significantly in recent trade and will continue to do so into the evening given the absence of US market participants, who are away for Martin Luthar King Junior Day. Things will pick up after 23:00GMT as market participants begin to return at the start of the Asia Session.
1/11/2021 4:03:11 PM GMT | By Joel Frank
GBP/USD has been hit as a function of the stronger USD on Monday and is below 1.3500.
Rising US bond yields continues to support USD versus its G10 peers and hurt other risk assets.
Shortly after the reopen of Monday FX trade (at 22:00GMT on Sunday), GBP/USD slid below a significant area of resistance in the 1.3530s-1.3540s that had been a solid floor since the start of the year. Downside continued into the European session and by the time US markets opened at 14:30GMT, the pair had slid through its 21-day moving average, which currently resides at 1.34909.
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BoE s Chief Wonk: Inflation spike could undermine recovery
(Photo by Dan Kitwood/Getty Images)
The Bank of England’s Chief Economist Andy Haldane has said that a “laser focus” is needed on inflation amid unprecedented public debt and fiscal stimulus.
Haldane fears that markets would only forgive a brief period in which inflation tops the Bank’s 2 per cent target, with any entrenchment seeing yields rise and increasing the cost of public debt significantly.
“The last thing the world needs right now is a nasty inflation surprise,” he told a Bloomberg podcast.
Earlier he had said that the Chancellor Rishi Sunak needed to keep the “insurance policy” of higher spending, particularly focused on avoiding unemployment, until the recovery is well underway.
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