- It will be a draw between which the results of the central bank will be more accommodating this week.
- Fed Chairman Powell will speak on Thursday, which is supposed to lay the groundwork for a longer cut.
- On Friday, the market will become the governor of the old lady who could touch negative interest rates.
GBP / USD is trading at 1.3198 after printing a new daily high so far at 1.3219 in a rally of 1.3117.
The fact that there was no progress in trade talks did little to stop this book from rallying midweek before the Jackson Hole showdown.
In the most recent information, EU trade negotiator Phil Hogan is said to have resigned today, which is yet another potential key in the work for Brexit negotiations as time is running out.
All eyes on the Jackson Hole and the governor of the BoE
Instead, the US dollar slips into the event where investors will be mostly focused on the Federal Reserve’s keynote on Thursday. at 14.10GMT.
The bulls capitulated ahead of the speech where a very accommodating outcome is the risk to the greenback.
The Federal Open Market Committee’s July minutes failed to fuel the rally in risky assets, so the stock markets are banking on a lifeline against the continued spread of the coronavirus and the grim prospects of an economic recovery.
The narrative of reflation and falling real yields has been a thorn in the side for Powell’s greenback tomorrow’s confirmation that the Fed will keep rates low, which could be the nail in the coffin for the DIY DXY. already on the verge of falling into the abyss.
Meanwhile, investors will want to hear Bank of England Governor Andrew Bailey speaking on Friday to get a sneak peek at any mention of negative interest rates.
Negative rates are still very much present in the playbook and any threat to use such support could prove disastrous for a vulnerable and potentially overvalued book.
While positioning data has likely moved longer, catching up with the cash market, a troubled winter is approaching messy Brexit negotiations, making it an unstable foundation for cable.
If you add negative interest rates, the bulls will definitely have their work cut out for them, no matter how weak the dollar is at that time.