Yahoo Finance GBP/USD Price Forecast – GBP/USD Losses 200 Pips as US Greenback Regains Momentum
The USD’s strength remains as the main theme of the FX space on Thursday. The GBP/USD pair, which touched a daily high of 1.3447 earlier in the day, broke below the 1.33 mark in the NA session to refresh its lowest level since June 1 at 1.3230. As of writing, the pair was trading at 1.3227, down 0.25% on the day. Asian market hours on Thursday saw US Greenback weaken as investors shifted focus to ECB policy meet updates, but ECB took a dovish stance and mentioned no possible rate hike till summer of 2019 which caused US Greenback to erase all loss from earlier in the day and take on a bull momentum. Major global counterparts of US greenback saw steady decline across North American market hours and early Asian market hours on Friday. This decline in value was very similar to Euro’s decline against US Dollar with British sterling losing over 200 pips since the pair reaching yesterday’s highs.
GBPUSD Moves Lower
This hawkish price action in favor of US Greenback was triggered by US Fed’s positive remarks during FOMC press meet, further with Draghi doing his best to avoid delivering clear remarks regarding the timing of a rate hike during ECB’s post policy meet press conference, investors assessed the USD as the currency with a higher potential of gaining value. The US Dollar Index broke above the 95 mark and extended its gains all the way up to 95.10 seeing nearly 2% increase in value compared to yesterday’s lows. Meanwhile, the UK’s Brexit department’s spokesperson crossed the wires earlier in the session and said that they were confident they would be able to reach a good Brexit agreement with the EU and the Parliament would back the deal.
Friday will be a bitter session for the Sterling, which finds itself forced to attempt to crawl out of a hole that appeared out of nowhere. Macro calendar remains thin for UK while US markets would see release of mid-tier Industrial Production for May at 13:15 GMT (forecast 0.2%, prev. 0.7%) and the Baker Hughes Oil Rig Count at 17:00 GMT which last came in at 852 which could impact oil fluctuations to cap off the week. The British pound has crossed multiple support boundaries losing all hopes of recovery, investors now look at the only silver lining left for the week in favor of British pound – U.S & China import tariff discussion updates. If US decide to levy tariff of Chinese import goods then renewed trade war tension could help global currencies gain ground against US greenback. On the flipside, if the week closes on positive note for US dollar then we could see the pair decline further as trading session moves further this month.
This article was originally posted on FX Empire
