The British Pound (GBP) remains practically flat for the second consecutive day against the US Dollar (USD), with markets on a “wait-and-see” stance, awaiting key US Inflation data on Wednesday and the Jackson Hole central bankers’ summit on Friday.
The GBP/USD pair flatlines around 1.3630 with the six-month highs of 1.3675 reached last week still in the bulls’ target
FX volatility is unusually low, in the absence of key macroeconomic releases, ahead of August’s US Personal Consumption Expenditures (PCE) Price Index figures, the US Federal Reserve’s (Fed) favourite inflation gauge. The market consensus points to sticky inflationary pressures, which would give further reasons for Fed hawks to call for monetary tightening. USD Positioning has flipped to short The highlight of the week, however, will be the Jackson Hole Symposium, and specifically Fed Chairman Kevin Warsh’s speech, with investors eager for clues about the bank’s near-term monetary policy path, as doubts about the central bank’s independence reemerge.
According to TD Securities’ analysts, “USD positioning has just flipped from long to short and has more room to grow.” They argue that “broad USD downtrends remain intact except in select pairs such as USDCAD,” underscoring that the latest move is not confined to a narrow set of crosses. Looking ahead, Strategists at UOB Group see room for further GBP appreciation in the next one to three weeks. The bank “turned positive on GBP last Monday (17 Aug, spot at 1.3540)” and they assess that the GBP/USD pair “could continue to rise to 1.3700 (unless) GBP breaks below 1.3585.” Pound Sterling FAQs The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom.