Cable sees strong rally

GBP/USD has broken the February high of 1.6823.

There has been discussion of a US bank selling USDs, which has caused good buying in EUR/USD, GBP/USD and AUD/USD.

Cable is the pair which is getting the most attention and it is now trading at the highest level since November 2009. A close above the February high will be positive.

Whether this is just a late reaction to Janet Yellen’s overnight comments is debatable. There is a school of thought that given the trend in UK house price and employment that perhaps the Bank of England could actually raise rates in Q4. Most still believe the UK central bank will hike in Q2, perhaps Q3, however there are growing calls that this is a touch pessimistic.

This is something to keep an eye on, but if the consensus changes over the coming months to a Q4 rate hike, the pound could soar.

GBP/USD
GBP/USD

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