GBP "May well be on the Verge of a Notable Comeback"
An eye-opening statement on the GBP/USD outlook from one of those analysts were regularly quote here at Pound Sterling Live.
Anyone yearning for a stronger British Pound will take heart from the view of analyst Fawad Razaqzada at Forex.com who reckons Pound Sterling is on the verge of a great comeback.
The call comes in commentary made in the wake of decisions on monetary policy made at the Bank of England and US Federal Reserve.
The Dollar fell against the Euro and Pound when the US Fed warned it was not willing to push interest rates higher on more than three occasions in 2017.
Dollar-bulls had been hoping for more.
“Like the Bank of Japan and Swiss National Bank, the Bank of England decided to keep its monetary policy unchanged” says Razaqzada. “BUT it wasn't a unanimous decision as Kristin Forbes voted for a 25 basis point rise amid concerns over inflation. This caused the pound to jump across the board.”
Meanwhile, the Queen has given the go ahead for Prime Minister Theresa May to trigger Brexit Article 50.
This was expected and thus didn’t cause the currency to weaken.
But with the UK set to start the process of leaving the EU in the coming days, and Scotland potentially on the verge of holding a second independence referendum, uncertainty remains high which could limit the gains for the pound.
“That being said, much of the negativity is already priced in. Thus, unless economic data deteriorates significantly now, Sterling may well be on the verge of a notable comeback,” says Razaqzada.
Above: Technical analysis of the GBP/USD exchange rate suggests we could be near another turning point for Sterling.
May Rejects Sturgeon's Scottish Referendum Request
Providing positive background music for Sterling at the current time is news that the UK Prime Minister will "completely and unambiguously" reject a demand for a second Scottish referendum on independence in 2018-2019.
May accused the SNP of jeopardising the UK's negotiations with the EU with talk of a second referendum - and said asking people in Scotland to make such a "crucial" decision without knowing what the EU deal will be would be "unfair".
The news should go someway in settling the uncertainty that a second referendum poses to the UK, and recall the Pound hates uncertainty more than anything.
However, we do have to wait to see the Scottish Parliaments response as there will be a vote next week.
May said:
"Just at this point, all our energies should be focused on our negotiations with the European Union about our future relationship.
"To be talking about an independence referendum will make it more difficult for us to be able to get the right deal for Scotland, and the right deal for the UK.
"And more than that, I think it wouldn't be fair to the people of Scotland because they're being asked to make a crucial decision without all the necessary information - without knowing what the future partnership would be, or what the alternative of an independent Scotland would look like."
