The pound has attempted to resume sell off during the trading session on Monday but has turned around to show signs of life again. The market is likely to continue seeing a bit of a recovery, and an attempt to get above the 1.3700 resistance.
US’s Federal Reserve is expected to officially announce its tapering decision, beginning the process of unraveling its US$120 billion in monthly asset purchases that had supported the US economy since the covid-19 pandemic. This tapering should then pave the way for US interest rates to be moved higher.
Markets are not convinced about a UK rate hike being announced on 4th November, assigning just a 43% chance at the time of writing, compared to the 60% chance given about a week prior (as of 22 Oct). Nevertheless, a December hike by the BOE remains fully priced in in the pound.
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