GBPUSD: Bailey to contest Powell punch to sterling
The cable saw its rally halted last week and has not reverted the trend on Monday as GBP/USD trades flat at 1.253. Yohay Elam, an analyst at FXStreet, is focused on the BoE decision on Thursday as an expansion of the Quantitative Easing program would boost the sterling.
“Andrew Bailey, Governor of the BoE, said that negative rates are ‘under active consideration.’ Several of his colleagues at the BoE, such as Andy Haldane and Silvana Terenyero also seemed to warm up to the idea. However, such a drastic step – that would weigh heavily on the pound – will likely wait. There is a higher likelihood that the ‘Old Lady’ will opt to expand its QE program. A large sum would boost sterling while a smaller one would weigh on it.”
“The BoE also publishes its meeting minutes, providing more information about it sees the economy at the current juncture. Similar to the Fed, optimism would support sterling and pessimism would weigh on it.”
“It is still to be seen if the spark of George Floyd's death in Minneapolis will continue spreading protests in Manchester and other cities in the UK. Brits' reopening of the colonial past may cause political stability and weigh on the pound.”
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