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Nov 08 - 11:55 AM

GBP/USD - COMMENT-Sterling Rises From Post-BoE Lows As Dovish Overtones Ebb

By Paul Spirgel  —  Nov 08 - 10:20 AM

GBP/USD rallied 0.44% to 1.3547 in early U.S. trade after holding last week's post-BoE lows long enough for the transitory inflation theme to dominate other global central bank speak, leveling the field for sterling somewhat.

As the BoE evaluates further data nS8N2QN053, the Fed nL1N2RZ0QM and ECB nS8N2MM04Z are also taking the patient route to varying degrees.

Though the BoE's dovish hold on Thursday dialed back expectations for a December hike below 50% BOEWATCH, GBP/USD bears are reluctant to test the 2021 low of 1.3412 hit on Sept.

Neither the Fed nor the BoE appears poised to lift rates, despite intermittent hawkish comments nS0N2O401Q.

Without the benefit of a hawkish BoE, or dovish Fed, sterling's rise from Friday's post-BoE low at 1.3425 is unlikely to muster enough momentum to make a credible run at post-summer highs by 1.3800.

However, a return to the daily cloud spanning 1.3622-1.3698 may be on the cards, attracted by the Nov.
22 cloud twist by 1.3665.

Upside risks for GBP/USD remain as BoE members were quick to reverse post-BoE dovish overtones.
The dollar, though currently robust, may see further gains tempered amid COVID, inflation and Fed leadership uncertainties heading into 2022.

For more click on FXBUZ

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary


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