GBP/USD: ‘Gotta Have Faith’ To Go Long Sterling On

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The pound is facing a rate hike for the first time since the crisis. And the big question is: what’s next? Here is the view from ING:

Here is their view, courtesy of eFXnews:

ING FX Strategy Research discusses GBP/USD outlook ahead of the BoE November policy meeting on Thursday.

“BoE officials will need to give the illusion that this is more than a one-and-done policy move to nip their currency-related inflationary concerns in the bud. We expect them to be successful in doing so, with the signal of a ‘gradual’ tightening cycle retaining an element of policy flexibility – while steepening the UK rate curve a bit.

Yet, we’re aware that the big picture focus for GBP remains Brexit – and we expect there to be some focus on a parliamentary testimony by Brexit Secretary David Davis on the economic implications of a ‘No Deal’.

An optimistic GBP outlook does require having bold faith in politicians to follow the economically rational path of a mutual divorce agreement with a status-quo transitional period until trade talks are over,” ING argues.

With the ‘Carney Put’ in place, we are more comfortable in enlisting such faith in politicians and retain a constructive GBP outlook (GBP/USD 1-month target 1.35),” ING concludes.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

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