empty
 
 
You are about to leave
www.instaforex.eu >
a website operated by
INSTANT TRADING EU LTD
Open Account

12.07.201901:26 Forex Analysis & Reviews: The pound could rise to $1.30, but you shouldn't buy it yet - RBC

Long-term review
This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Exchange Rates 12.07.2019 analysis

The British currency strengthened against the US dollar for the second consecutive day. The GBP/USD pair rebounded from multi-month lows, breaking the psychological mark of 1.25 amid statements by the head of the Federal Reserve (FED) Jerome Powell, perceived by the market as a signal of the regulator's readiness to relax monetary policy.

However, the joy of "bulls" on the pound may be short-lived, since the achievements of the sterling are mainly due to the weakness of the greenback.

"Despite the local improvement of the technical picture, which implies some potential for the recovery of GBP/USD, you should not count on the stability of the upward movement," strategists at Royal Bank of Canada (RBC) said.

They revised their forecast for the Bank of England rate and no longer expect it to increase in the first quarter of 2020.

The RBC expects that in light of the weak growth of the country's economy and the continued risks of a hard Brexit, the central bank is likely to cut its rate by 25 basis points this November.

"The coming months will be a period of heightened volatility for the pound, given the possibility of holding early Parliamentary elections in the United Kingdom and a new chapter in the divorce process of Great Britain and the EU, which should be completed before October 31," analysts said.

"It is possible that by the end of the year GBP/USD will return to the level of 1.30 amid easing of the Fed's monetary rate and reducing uncertainty in the UK, but the potential risk/reward ratio does not give reason to talk about the attractiveness of long positions in the pound," they added.

Viktor Isakov
Analytical expert of InstaForex
© 2007-2024

Open trading account

InstaForex analytical reviews will make you fully aware of market trends! Being an InstaForex client, you are provided with a large number of free services for efficient trading.




You are now leaving www.instaforex.eu, a website operated by INSTANT TRADING EU LTD
Can't speak right now?
Ask your question in the chat.

Turn "Do Not Track" off