As we start the week, positive data releases from Friday helped the pound consolidate against recent losses. This week the economic calendar is due to be a lot quieter than last for sterling, meaning news headlines and prevailing sentiment will guide markets and prices.
Currently making another run towards the key psychological level of 1.40, GBPUSD traders will be looking forward to the highlight of the weekly calendar where the Federal Reserve issues their interest rate decision. As with the rhetoric following previous releases, the Fed are expecting to keep interest rates low for a number of years to support the US economy. And with every interest rate decision, more so over the last year, markets will be awaiting the following press conference for signs of what the central bank is predicting for the road ahead to recovery.
Despite positive sentiment across the markets, there are still doubts over global recovery from the Covid pandemic. India is currently in a severe situation, with all major news outlets reporting hospitals are being overrun under increased pressure throughout a second wave of Covid infections. With the US dollar being the haven currency for protection in times of doubt, there could be forces pulling the dollar in either direction come the middle of the week.
Have a great day.
Jack Nicholls, Relationship Manager.
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