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Thomson Reuters
Jun 14 - 02:36 PM
GBP/USD - COMMENT-ECB Swamps Sterling, Putting Recent Lows On Agenda
First appeared on eFXplus on Jun 14 - 10:30 AM

GBP/USD could be headed for its recent set of troughs below 1.3310 after the ECB's dovish marketing of its QE tapering plans nEONI670TS spilled over into cable.
EUR/USD
retreated from its high near 1.1850 and cable peeled off in sympathy, though at a slower pace than the single currency as EUR/GBP dropped 0.6 percent compared to GBP/USD's 0.4 percent dip.
The dovish ECB and dollar buying following yesterday's hawkish Fed put added pressure on cable since the market (BOEWATCH) still sees a sub-50 percent chance of the BoE hiking by August.
Despite a hawkish leaning BoE [ Click here

], continued Brexit angst, low growth and inflation falling toward the BoE's 2 percent are discouraging GBP/USD bulls. The ramped-up Fed outlook has left the market factoring in odds of a fourth 2018 U.S. hike at just below 50 percent.
A cable move below the June 5 low of 1.3303 would put the 2018 trough of 1.3205 in focus, and then the October 6, 2017 low of 1.3027.

Chart: Click here

Draghi comments at ECB press conference: nL8N1TG3RJ

Source:
Thomson Reuters IFR Markets

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