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GBP prices, news and analysis:
- GBPUSD is down despite the weak dollar as a result of the Fed's more accommodating stance, reacting to the gloomy expectations of the UK economy after Brexit.
- EURGBP has risen following warnings from the UK Treasury and the Bank of England, suggesting that all the bad news has not yet been announced.
GBP price weakened by gloomy forecasts for the UK economy
The pound fell back after Wednesday's pessimistic economic forecasts from the Bank of England and the British Treasury, suggesting that the weakness of the British economy after Brexit has not yet been fully integrated into GBPUSD or GBP crosses.
The price in USD was hit on Wednesday when Federal Reserve Chairman Jerome Powell suggested that the Fed would be about to end its rate hike cycle, although a further rise in rates of interest was expected. US interest next month remains likely. As a result, the GBPUSD gained ground but lost almost everything early in the European session on Thursday.
GBPUSD Price Table for 30 minutes (26-29 November 2018)
Graph by IG
This GBP weakness was also reflected in EURGBP, with the jump across despite claims by Brexit fans that the predictions were simply part of the "Project Fear" designed by the anti-Brexit camp to weaken the Brexit sentiment.
30-hour EURGBP price table (26-29 November 2018)
Graph by IG
The price of the British pound has also been affected by suggestions that it is unlikely that the Bank of England will raise interest rates in the UK, since the weakness of its economy is expected to be continue. However, the BoE's prediction that UK banks would survive an economic slowdown is reassuring, as all have passed BoE stress tests.
Looking ahead, two data points published just after midnight, Thursday / Friday, local time, could be important for GBP. GfK's consumer confidence figures and Lloyds' business barometer for November are published, with analysts expecting a further decline in confidence, another potential negative effect for the pound.
More to read:
Chronology of Brexit: the way to go
Effect of Brexit on British Pounds and British Equities: Impact of Transaction or Non-Transaction
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— Written by Martin Essex, Analyst and Publisher
Do not hesitate to contact me via the comments section below, by e-mail to the address [email protected] or on Twitter @MartinSEssex
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