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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.
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

Thomson Reuters IFR Markets


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