The GBP / USD pair continues to move up against the background of the weakening of the dollar and the appearance of encouraging news about the course of trade negotiations between the UK and the EU.
The pressure on the American currency was mainly exerted by the news from the USA. Following the two-day meeting, the US Federal Reserve kept the main parameters of monetary policy unchanged. The regulator said it intends to keep interest rates at current levels at least until the end of 2023. Also, the Fed intends to maintain the current volume of the asset repurchase program until the targets for employment and inflation are achieved. Democrats and Republicans today announced a breakthrough in negotiations on a new stimulus program. Lawmakers hope the new funding program will be adopted this week. The buildup of stimulus measures in the US is expected to increase the pressure on the national currency.
The main impetus for the strengthening of the British currency are the latest statements by the EU representatives, who note positive changes in trade negotiations. Recently the head of the European Commission Ursula von der Leyen said that both sides are closer to reaching an agreement, adding that the progress achieved is not yet a guarantee of signing the agreement. Previously low-key optimism about the talks was noted by Irish Prime Minister Mikal Martin.
Today a meeting of the Bank of England will take place at which the regulator will have to make a very difficult decision, since the uncertainty of trade negotiations on Brexit has reached its peak. Economists surveyed by Bloomberg predict that the benchmark interest rate will remain at 0.1% and the bond buying program at £ 895 billion ($ 1.2 trillion).
The currency pair has renewed the local maximum at 1.3550 and intends to continue moving upwards with a new target at 1.3600.
The main scenario is growth to 1.3600.
An alternative option is a rollback to 1.3500 from current levels.
The current fundamental outlook is moderately positive. We consider longs from the level of 1.3500.
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