Good and bad factors | 20 7月 2021

20 7月 2021, GBP/USD

GBPUSD trading plan:

The Bank of England should not cut back on stimulus too early, a top economist Catherine Mann, who will soon join the BoE’s rate-setting committee, said, underscoring a divide among UK policymakers about how to respond to rising inflation. The BoE expects consumer price inflation to surpass 3% soon, well above its 2% target, though most policymakers see the rise being driven by one-off or temporary effects such as a jump in oil prices and post-pandemic bottlenecks in supply chains. This is a negative signal for the British currency. Fed Fund futures, a widely used security for hedging short-term interest rate risk, showed the chances of the Federal Reserve hiking rates in December 2022 dropped to 58% from 90% on July 13, when the U.S. consumer price index was released. This is a negative signal for the U.S. dollar!

Investment idea: range 1.3610 -1.3710.

David Johnson
Analyst of «FreshForex» company
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