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British Pound (GBP) Price Outlook: GBP/USD Regular, Sterling Gains on EUR, JPY

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GBP value, information and evaluation:

  • GBP/USD is holding its floor regardless of a robust US Greenback, helped by information that the UK economic system is increasing quickly and expectations of a UK charge improve.
  • This implies persevering with losses for EUR/GBP and beneficial properties for GBP/JPY, with the newest UK GDP figures backing up the expansion narrative.

GBP outlook brilliant on financial enlargement hopes

GBP is holding its floor in opposition to a robust US Greenback as the newest UK GDP information reinforce the image of a buoyant UK economic system.

The figures present GDP development 12 months/12 months up 6.9% in August, down from July’s 8.8% however above the 6.7% predicted. Which means the UK economic system is now inside 0.8% of its pre-pandemic measurement and reinforces expectations that the Financial institution of England will improve its benchmark Financial institution Charge to 0.25% from 0.10% by the tip of this 12 months.

UK GDP data.

Supply: DailyFX calendar

The statistics had been launched only a day after the Worldwide Financial Fund forecast that the UK would obtain the quickest enlargement of any nation within the G7 group of developed international locations this 12 months. The IMF additionally warned of excessive inflation, primarily backing the necessity for a charge rise.

This has all helped GBP preserve tempo with a agency USD that has been boosted by excessive vitality costs, inflation fears and the prospect that the US will doubtless announce a tapering of its asset purchases subsequent month. The probabilities of a US charge improve by July subsequent 12 months at the moment are 50/50 judging by market pricing.

GBP/USD Price Chart, Two-Hour Timeframe (September 30 – October 13, 2021)

Latest GBP/USD price chart.

Supply: IG (You possibly can click on on it for a bigger picture)

Sterling’s steadiness in opposition to the USD means it has gained in opposition to currencies just like the Euro and the Japanese Yen, with EUR/GBP falling and GBP/JPY rising. Trying forward, these traits look set to proceed, though GBP/JPY is now in overbought territory judging by the 14-day RSI.

GBP/JPY Price Chart, Each day Timeframe (Might 19 – October 13, 2021)

Latest GBP/JPY price chart.

Supply: IG (You possibly can click on on it for a bigger picture)

— Written by Martin Essex, Analyst

Be happy to contact me on Twitter @MartinSEssex

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