Reasons To Like The GBP Right Now
The first BOE meeting for the year is schedule for Thursday and is set to be a very interesting event as the bank will finally reveal their long-awaited study on the impact of negative interest rates.
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Recently we’ve taking a bullish bias on the GBP as there has been more positive drivers than negative ones. The first positive took place on the 12th of January after Governor Bailey pushed back against negative interest rates, which saw the markets pushing back their expectations for the bank taking rates to negative territory later this year.
After that we’ve also seen a remarkable reduction in new virus cases across the UK as the extended lockdown measures have started to do their job. We’ve also had a huge cloud of uncertainty removed after the EU and the UK agreed a trade deal at the end of the last year.
Arguably, one of the most positive developments has been the UK’s vaccination program, which is currently well ahead of the EU and US by getting the population towards herd immunity. There is still a long way to go of course but a good start, nonetheless.
Thus, we believe there is more positives than negative for the GBP right now, and this week’s upcoming BOE meeting might just be the cherry on top of the cake to seal the deal for more GBP strength to come.
Highlights of the video:
00:29 – Current Baseline
02:41 – Baseline expectations for the upcoming week
05:32 – Sentiment Shifts & Trade Plan
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