This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
GBP/USD bounce looks to be short-lived
Yesterday saw the Monetary Policy Committee confirm the voting at the last interest rate decision meeting. Unsurprisingly, the vote remained 9-0 against any change. However, the minutes of this meeting did reveal that two members have voiced their thoughts on the possibility of raising the rate.
The currency markets are still factoring in the first US interest rate rise for September 2015, and for the UK they are looking toward either Q2 or Q3 2016. For the time being, these two timelines look unlikely to change. The big unknown in this equation remains to be when the UK will hold a referendum on its inclusion in the EU and how close the results are.
The inflation picture for the UK still remains clouded but this morning’s much better-than-expected retail sales figures might well help it move closer to the targeted 2% level.
GBP/USD has bounced in the last 24 hours as we have once again heard from the US Federal Reserve. However, the reasons for optimism still remain stacked in favour of the dollar and last week’s high could well be a barrier that GBP/USD finds too tough to break.