The Great Britain pound was moving basically sideways since the middle of September. Can the sterling break from the range or sideways trading will persist in the future?
Fundamentals were helping the UK currency, and this weekâs macroeconomic reports are also expected to be mostly supportive. Yet the pound was not able to rise above the recent highs even with the help of positive economic data, primarily because recovery was already priced in. The factor that may shift the balance in favor of the currency is the inflation report released by the Bank of England. The current BoE Governor Mark Carney is a known hawk and it is expected that projections in the upcoming report will be more optimistic than in the previous one. Moreover, Carney will speak on November 13 (the day when the BoE report will be released) and his speech may provide additional boost for the sterling. Negative surprises should not be ruled out, though, but whatever the case Carneyâs report and speech will likely affect Britainâs currency strongly and may allow it to break from the current range.
Of course, the sterlingâs performance should not be the same against different currencies. It is not likely that the pound will be able to gain on the dollar, which was boosted by last weekâs non-farm payrolls report. At the same time, the sterling may extend its rally versus the euro, which was weakened by the unexpected interest rate cut from the European Central Bank. As a result of such outlook, DailyFX is bullish on the pound generally, but Forex Crunch is neutral on the GBP/USD currency pair.
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