GBP/USD has tested the 1.35 level ahead of key domestic data releases this week. Economists at Scotiabank believe that the cable could plunge to the 1.32 level if Russia makes a move into Ukrainian territory.GBP to lose its footing as market reassess the outlook for BoE policy
“The ONS’s data on January payrolls and inflation should go a long way to confirming BoE hike expectations although we think that markets are overconfident in their assessment of a 50bps increase. OIS markets reflect an 80% chance of such a move and also expect the bank rate to reach 2% as soon as November, which is too steep of a hiking pace and too high of a terminal rate for the BoE to follow.”
“Rate hike bets may be getting stretched in the case of the Fed but, overall, we think there is more for disappointment from the BoE, which presents downside risks for the GBP.”
“A Russian invasion of Ukraine would likely trigger GBP losses under 1.34 with an eventual test of the 1.32 zone.”
EUR/USD climbs to mid-1.1300s after EU.EUR/USD continues to edge higher toward the mid-1.1300s during the European session as market mood continues to improve. The data from the euro area showed that the Gross Domestic Product expanded at an annualized rate of 4.6% in the fourth quarter as expected..EUR/USD News ….GBP/USD clings to modest daily gains above 1.3500 after UK data..GBP/USD continues to move sideways above 1.3500 during the European trading hours on Tuesday as investors await geopolitical developments. The data from the UK showed that the ILO Unemployment Rate remained unchanged at 4.1% in three months to December as expected.
GBP/USD News..EUR/USD climbs to mid-1.1300s after EU.EUR/USD continues to edge higher toward the mid-1.1300s during the European session as market mood continues to improve. The data from the euro area showed that the Gross Domestic Product expanded at an annualized rate of 4.6% in the fourth quarter as expected.
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