The Pound fixed in the range. Overview for 18.08.2017

18.08.2017

By the end of the week, the GBP/USD pair has become less volatile; the instrument is steadily moving sideways.

On Friday, the British Pound is trading to the upside against the USD. the current quote for the instrument is 1.2897.

As Bloomberg agency put it today, one shouldn’t wait from the Bank of England for any early decisions relating to the rate change. The statistics is excellent, the labor market is positive and the number of jobs is growing faster than expected, as well as the inflation. However, if the market thinks that it’s enough for tightening the monetary policy, it risks to run into the same trap for the third time this year.

At the moment, the CPI in the UK is 2.6% y/y (the June number). The target of the British regulator is 2% –   this is what the BoE is aiming for with its soft monetary policy.

The labor market also seems quite stable. The Unemployment Rate in the United Kingdom is the lowest since 1975. Supposedly, combine these two factors of the basic support and you will get a perfect reason to increase the rate.

However, the Bank of England is not a fan of any sudden and fast movements. The regulator emphasized on numerous occasions that it wasn’t going to add more stress to the country’s economy as long as it was not ready for tighter fiscal conditions. And the Brexit is not the main point here. Most probably, the point is to provide more stability and reliability. It’s a good signal for the Pound.

 

RoboForex Analytical Department

 

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Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex bears no responsibility for trading results based on trading recommendations described in these analytical reviews.