- GBP/USD Hits Fresh Session Highs, Breaks 1.7100 Handle After UK CPI
- British Pound is an Attractive Buy on Dips
The Bank of England (BoE) Minutes and the U.K.’s 2Q Gross Domestic
Product (GDP) report is likely spark increased volatility in the
GBP/USD as market participants continue weigh the outlook for monetary
policy.
The BoE policy statement may prop up the British Pound as a growing
number of central bank officials show a greater willingness to
normalize monetary policy sooner rather later, but we would need to see
a greater dissent within the Monetary Policy Committee (MPC) to see
fresh yearly highs in the GBP/USD as the pair retains the range-bound
price action from earlier this month. With that said, a more hawkish
statement along with a greater rift within the MPC may drive the
British Pound higher ahead of the next quarterly inflation report due
out on August 13, and the going shift in the policy outlook may
continue to heighten the bullish sentiment surrounding the sterling as
it boosts interest rate expectations.
With that said, we would need to see a series of positive fundamental
developments to see a higher-low being carved ahead of the 1.7000
handle, but the GBP/USD may face a larger correction over the remainder
of the month should the U.K. event risks drag on interest rate
expectations.
