FXStreet (Guatemala) – GBP/USD is currently trading on the bid at 1.5790 at time of writing with a high of 1.5796 and a low of 1.5624 post the dovish FOMC decision and statement.
GBP/USD has resumed the bid at time of writing on a less hawkish FOMC, while the price is subject to change of course but the price had initially dropped t 1.5667 on the knee jerk while the 10yr T-bills have ticked up on the back of comments from the FOMC that labour slack is diminishing and there is improved economic progress in terms of GDP 2016 forecasted 2.3-2.7 which is upgraded from the 1.8% previous on the lower end which is a large increase.
However, the dovishness comes in the pace of increases of rates which are sighted to be more incremental than the March statement. The median fed fund rate end of 2016 is now seen as 1.625% vs prev 1.875% and end of 2017 comes as 2.875% vs prev 3.125%.
We are continuing to see a weak dollar on the back of this outcome. Otherwise, today has been a busy day and favourable for Sterling in its own roght, and most recently, BoE’s Forbes were reported as foreseeing an increase in UK rates even before the 2% BoE target is reached. Meanwhile, from the docket, Sterling was strong on wage growth numbers with weekly earnings out at 2.% vs 2.1% expected. The BoE minutes showed however a 9-0 vote for rates to remain unchanged although 2 voters were on the fence this time around and maybe voting for a hike, adding support to the pound and weighing in on the cross.
GBP/USD’s technical outlook is still clearly bullish for 1.5700 where a break will target 1.5820 next for last months high.
(Market News Provided by FXstreet)