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The pound and the US have rebounded continuously, and the US dollar is still in the short term

2022-08-01

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GBP/USD rebounded for the second week in a row, hitting a new high of 1.2244 since June 28, benefiting from the dollar's continued retreat. It is unlikely that the Bank of England will raise interest rates by more than 25 basis points next week, and the short-term trend of the pound will continue to see the face of the dollar. GBP/USD will fall to 1.19 over the next three months, more negative than the market consensus for the pair to fall to 1.21.

The U.S. Commodity Futures Trading Commission CFTC foreign exchange non-commercial position report shows that as of the week of 2022-07-26 (hand) GBP long positions increased by 2,663 hands to 34,606 hand positions. The "slow step" of the Bank of England in monetary policy adjustment is the key reason for the 11% drop in the pound against the dollar this year; the "indecision" of the Bank of England on raising interest rates will eventually lead to further depreciation of the pound;

The market had expected the Bank of England to announce a rate hike of 50 basis points on August 4, and some economists even hinted that another 50 basis point rate hike may be possible in September. There is enough economic evidence to support a 50bps rate hike at the next monetary policy meeting on Aug. 5, but after that, slowing economic activity and further evidence that the labor market is cooling should support the pace of rate hikes Slowing down (25bps each in September, November and December). "

Standard Chartered Bank (StandardChartered) European economist Graham (ChristopherGraham) said that the tightness of the British labor market is rapidly easing. PantheonMacroeconomics raised its forecast for Britain's October CPI inflation peak to nearly 12% from just over 11% previously, after a further surge in wholesale gas and electricity prices. The agency believes that core CPI inflation in the UK has peaked, while producer output price inflation is "about to run into trouble".

Graham said: "The mid-August jobs report will be crucial in determining whether a 50bps rate hike is needed later in the year (as the market expects), or whether the pace of monetary tightening slows to a rate hike. 25bps (as we expected). We think there is enough economic evidence to support a 50bps rate hike at the next monetary policy meeting on Aug. 5, but after that, economic activity slows, and labor Further evidence that the market is cooling should support a slower pace of rate hikes (25bps each in September, November and December).”

Economists at Barclays raised their forecast for the size of the Bank of England's rate hike in August. Barclays noted that the U.K. data is proving "overall fairly resilient data" suggesting the economy "is cooling, but not collapsing." Although business activity at UK private sector firms rose for the 17th consecutive month in July, the pace of expansion was the weakest for the same period. The slowdown in output growth mainly reflects weak demand and capacity constraints due to material and staff shortages.

GBP/USD daily candlestick chart shows:

The low-level bulls have a strong reversal and pulled up, and the short-term bulls have continued to move upwards. The top suppresses and focuses on the vicinity of 1.23444, and the low-level support focuses on the vicinity of 1.19324. The bullish sentiment in the market has begun to heat up. The MACD indicator remains in the bearish area and moves up to the 0 axis. , the RSI indicator is in a narrow range on the side of the 50 equilibrium line, as shown in the figure:

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The pound and the US have rebounded continuously, and the US dollar is still in the short term

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