The outlook for GBP/USD has improved modestly after Bank of England Chief Economist Andy Haldane suggested Wednesday that the central bank might be closer to tapering its monetary stimulus program than thought previously.
In a radio interview, Haldane said there were already some “pretty punchy pressures on prices”, adding that the UK central bank “could start tightening the tap on that, slowing down the amount of money we’re printing, and ultimately perhaps even starting to turn that around.”
GBP/USD edged ahead on Haldane’s comments before easing back as traders realized that Haldane is due to leave the BoE later this month and is generally seen as hawkish anyway, having voted last month to reduce the size of the Bank’s bond-buying program.
Still, his comments are positive for GBP/USD, albeit it is unlikely to break out of its recent relatively narrow trading range.
EUR/USD seems to be stuck in a narrow range despite the upward revision in the Euro-Zone Gross Domestic Product (GDP) report, and the exchange rate may continue to consolidate ahead of the ECB meeting as the central bank appears to be on track to retain the current course for monetary policy.
It appears the ECB is in no rush to switch gears as President Christine Lagarde offered dovish guidance following a Eurogroup meeting from earlier this month, and the Governing Council may continue to support the Euro Area as the monetary union faces a technical recession.
In turn, the ECB may stick to the same script as “the outlook for both growth and inflation remained dependent on the support of fiscal policy measures and the very accommodative monetary policy,” and more of the same from President Lagarde and Co. may spark a bearish reaction in EUR/USD if the Governing Council stays on track to increase its purchases under the pandemic emergency purchase program (PEPP) “at a significantly higher pace than during the first few months of the year.”
Daily FX Market Analysis– 09th June 2021
GBP>EUR – 1.1638
GBP>USD – 1.4180
EUR>USD – 1.2184
GBP>CAD – 1.7151
GBP>AUD – 1.8304
GBP>SEK – 11.730
GBP>AED – 5.2067
GBP>HKD – 10.999
GBP>ZAR – 19.187
GBP>CHF – 1.2708
· CAD BoC Rate Statement
· CAD BoC Interest Rate Decision
- GBP/USD bounces toward 1.42 on BOE's taper talk
- EUR/USD consolidates below 1.2200 amid softer US dollar
- UK's reopening worries offers an opportunity to buy sterling on EUR/GBP and GBP/AUD – OCBC
- Gold set to start to outperform silver in the short-term – Credit Suisse
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