GBP/USD Trades Bearish as BOE Officials Sound Dovish About Economy
Early on Monday, the Pound is trading slightly bearish against the US dollar, close to two-week lows, over increasingly dovish comments from BOE officials hinting at the possibility of an upcoming rate cut. At the time of writing, GBP/USD is trading at around 1.303.
Last week, BOE Governor Mark Carney suggested that the bank could possibly respond promptly if it felt that the weakness in Britain’s economic growth continued. On Friday, we also heard BOE official Silvana Tenreyro hinting at a possible rate cut in the near future if Britain’s economy doesn’t recover.
Meanwhile, analysts expect the BOE to continue holding interest rates steady at least until Brexit uncertainties are sorted out and the dust settles on the exit process. Economists expect the Bank of England to maintain interest rates at 0.75% at least till 2021.
GBP/USD has also weakened on the back of the US dollar recovering some lost ground over growing optimism for the US-China phase one trade deal. The US and China are set to sign their partial trade deal on Wednesday, which could bring about a considerable improvement in trade tensions.
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