GBP/USD out of three-day losing streak, approaches to 1.3850
- Cable recovers from three straight days of losses.
- US Dollar index rally nearing its end, drops in the session.
- BoE’s Bailey says minimal conditions for an interest rate have been achieved.
After recording losses for three days in a row, GBP/USD is trading at 1.3841, up 0.50% at the time of writing. Broad US dollar weakness, upbeat market sentiment and hawkish comments from BoE’s Governor Andrew Bailey lifted the British pound value against the greenback.
As previously mentioned, the market sentiment is in risk-on mode. US major equity indices are rising between 0.25% and 0.35%, while the US dollar index is at 92.58, losing a minimal 0.08%, and posting its first losing day in the week.
On Wednesday, the BoE Governor Andrew Bailey appeared at a hearing at the parliament. He commented that he was one of the MPC members who thought that minimal conditions had been reached to consider an interest rate hike, as the UK economy recovers from its pandemic recession in 2020.
Across the pond, the US Jobless Claim Report fell to 310K versus the 335K foreseen by economists in the week that ended on September 4. The reading is the biggest fall since June on a weekly basis. The labor market shows some resilience, though it is still short of the Federal Reserve target of achieving substantial further progress.
Putting this aside, the Atlanta Federal Reserve Chief Raphael Bostic, in an interview with the WSJ, reiterated that the cut of the bond purchasing program could start at the end of the year, though he does not expect an announcement in the September FOMC meeting.
Later on the day, the NY Fed’s Chief John C. Williams and Fed’s Governor Michelle W. Bowman will hit the wires.
TECHNICAL LEVELS TO CONSIDER