GBPUSD moved lower as expected and moved faster to brake 1.700 after the Inflation Report hearing. Carney’s testimony in front of the UK Parliament suggested that the BoE is a long way off from hiking UK interest rates.
Carney’s dovish statements in front of the Treasury committee were completely contrast to his view a week ago when he suggested that rates could rise as early as this year. Carney also tried to clarify that his earlier views was merely expressing his own opinion, not the opinion of the full Monetary Policy Committee.
So it is clearly that a rate hike schedule is unknown now, at least until economic data show more improvement and this is not a good news for GBPUSD.
We expect GBPUSD continue to move in the range below 1.700 today and may move lower to 1.6920 if US GDP data today is good.
Our strategy today is to short GBPUSD around 1.700 to wait for US GDP data.
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