GBP/USD recap for 08.10.2015
Yesterday's BoE minutes gave the pound a push higher, which was a bit excepted, because the overall tendency for UK is to go for a rate hike. Headlines:
- Timing of Fed liftoff will not affect timing of eventual BoE move;
- China's important for the UK but not decisive;
- Repeats that timing of rate hike will come into sharper focus around the end of the year;
- Everybody recognizes there isn't going to be a big surge in demand from abroad;
- Concern in the global economy abut big buildup of debts
Carney remains a hawk and the chances of a hike before the Fed are solid.
The pound started the day falling 44 pips from its opening price at 1.53473 on earlier comments that BoE will have in mind the decision from Fed, but when Carney came up, all was clear for a rally, which continues today. The price made 62 pips to its top at 1.53717 before closing lower at 1.53447. Now the price stutters at 1.53650 and if broken, the price will go up to 1.54798. I would advice caution, because as tradition holds pound rallies are not to last too long and are sold-off hard. If you've missed the initial impulse starting from 1.51344 or the one from 1.52337 it will not be wise to enter in the middle of it right now as perhaps a slight correction will occur before the pound gets any higher. Still this depends on the overall UK economy conditions and behavior and if Carney will remain hawkish until the end of the year. But rhetoric is always illusive when it comes from bankers or politicians.