British Pound Price Forecast: Optimistic BoE To Buoy GBP/USD, GBP/JPY

ASIA-PACIFIC RECAP

Equity markets broadly gained during Asia-Pacific trade as the Federal Reserve confirmed that it would keep interest rates at current levels through 2023. Japan’s Nikkei 225 soared 1.01%, Hong Kong’s Hang Seng Index surged 1.56%, and China’s CSI 300 jumped 0.42%. Australia’s ASX 200 dipped 0.73% lower despite strong employment figures, as yields on Federal government bonds spiked 7-basis points higher.

In FX markets, the risk-sensitive Australian, New Zealand, and Canadian Dollars largely outperformed while the haven-associated US DollarSwiss Franc, and Japanese Yen lost ground. Gold and silver prices gained as yields on US 10-year Treasuries held relatively steady at 1.66%. Looking ahead, the Bank of England rate decision headlines the economic docket, alongside jobless claims data out of the US.

British Pound Price Forecast: Optimistic BoE to Buoy GBP/USD, GBP/JPY

DailyFX Economic Calendar

OPTIMISTIC BOE TO BUOY BRITISH POUND

The Bank of England’s upcoming monetary policy meeting may pave the way for the British Pound to extend its climb higher against its haven-associated counterparts, given the diminished prospect of further easing amid a rapidly improving fundamental backdrop.

The expeditious distribution of coronavirus vaccines has allowed the United Kingdom to move to stage one of the four-stage reopening plan introduced by Prime Minister Boris Johnson’s government, which sees the return of in-class schooling this month, followed by the reopening of outdoor hospital settings in mid-April, sporting venues in mid-May, and all other businesses by June.

Moreover, the supply of an additional 10 million doses of AstraZeneca’s vaccine will likely see the inoculation rate double in the coming weeks, and may potentially allow all adults to receive their first shot by the start of June. This suggests that the nation may return to a level of normality by the middle of the year.

British Pound Price Forecast: Optimistic BoE to Buoy GBP/USD, GBP/JPY

Moreover, recent fundamental data has been relatively positive, with January GDP showing that the nation’s economic output contracted drastically less than expected estimates.

1 2 3
View single page >> |

Disclosure: See the full disclosure for DailyFX here.

How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.