{"id":18223,"date":"2021-10-20T07:22:12","date_gmt":"2021-10-20T05:22:12","guid":{"rendered":"https:\/\/bernstein-bank.com\/?p=18223\/"},"modified":"2021-10-20T07:22:12","modified_gmt":"2021-10-20T05:22:12","slug":"what-will-happen-to-the-pound","status":"publish","type":"post","link":"https:\/\/bernstein-bank.com\/en\/what-will-happen-to-the-pound\/","title":{"rendered":"What will happen to the pound?"},"content":{"rendered":"<table cellspacing=\"0\" cellpadding=\"4\">\n<tbody>\n<tr>\n<th>\n<h4 style=\"text-align: center;\"><span style=\"color: #e2b365;\">Gold<\/span> 1773,45<br \/>\n(<span style=\"color: #008000;\">+0,26%<\/span>)<\/h4>\n<\/th>\n<th>\n<h4 style=\"text-align: center;\"><span style=\"color: #e2b365;\">EURUSD<\/span> 1,1649<br \/>\n(<span style=\"color: #008000;\">+0,16%<\/span>)<\/h4>\n<\/th>\n<th>\n<h4 style=\"text-align: center;\"><span style=\"color: #e2b365;\">DJIA<\/span> 35330<br \/>\n(<span style=\"color: #ff0000;\">-0,03%<\/span>)<\/h4>\n<\/th>\n<th>\n<h4 style=\"text-align: center;\"><span style=\"color: #e2b365;\">OIL.WTI<\/span> 82,03<br \/>\n(<span style=\"color: #ff0000;\">-0,51%<\/span>)<\/h4>\n<\/th>\n<th>\n<h4 style=\"text-align: center;\"><span style=\"color: #e2b365;\">DAX<\/span> 15490<br \/>\n(<span style=\"color: #008000;\">+0,01%<\/span>)<\/h4>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p align=\"justify\">The Bank of England is seriously concerned about raising interest rates. On Sunday, its chairman Andrew Bailey stressed, not for the first time, that the central bank &#8220;will have to act&#8221; as rising inflation becomes a problem. What does this mean for the pound and the traders who trade it?<\/p>\n<p style=\"text-align: center;\"><strong><br \/>\nGBPUSD<\/strong><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-18224 aligncenter\" src=\"https:\/\/bernstein-bank.azureedge.net\/wp-content\/uploads\/2021\/10\/GBPUSD.png\" alt=\"GBPUSD\" width=\"600\" height=\"268\" \/><\/p>\n<p align=\"justify\">Since last week the Bank of England has been actively signalling to the market that it is time to raise rates. Although everyone has inflation on the rise, even the Fed is in no hurry to raise rates (but is preparing to roll back bond purchases).<br \/>\nAnd while the Fed and ECB argue that rising prices will still be temporary, Andrew Bailey says that inflation above 2.0% is worrisome, which means it must be dealt with to prevent such levels becoming chronic.<br \/>\nThe Bank of England interest rate is now at a record low of 0.10%. But the markets already estimate a 90% probability of a 25 basis point increase at the November meeting. By February the rate could rise by 50 basis points.<br \/>\nAnd how is the pound reacting to this? It would seem that with such hawkish statements, sterling should be on the rise. And it is. But somehow it is sluggish and mostly at the expense of a falling dollar index.<br \/>\nSo what is it? Judging by the statements of the other members of the Monetary Policy Committee, not everyone supports such a radical Bailey plan. This means that the Governor of the Bank of England will have to work hard to persuade his colleagues to vote for a rate hike.<br \/>\nAnd even if that happens, it will probably not be unanimous. But so far, judging by the reaction of the pound, market participants prefer to proceed cautiously.<br \/>\nWhat should traders do now? Based on the technical picture, GBPUSD still has room to move up to the 1.4000 area if it manages to pass the current resistance near 1.3800.<br \/>\nAbove the level of 1.4000 the pair has not been above since mid-June, and if it manages to consolidate above this level, the next target for strengthening will be near the highs of February and May (~1.4200).<br \/>\nAnd if the Bank of England does indeed raise the rate at the next meeting, sterling could go up in earnest. But, let&#8217;s not get ahead of ourselves, there is not much time left until 4 November.<\/p>\n<p align=\"justify\">08.00 UK consumer price index for September<br \/>\n11.00 September Consumer Price Index for the Eurozone<br \/>\n14.00 Canadian September Consumer Price Index<\/p>\n<hr \/>\n<p style=\"text-align: center;\" align=\"justify\">Important Notes on This Publication:<small> <\/small><\/p>\n<p align=\"justify\"><small>The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.<\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold 1773,45 (+0,26%) EURUSD 1,1649 (+0,16%) DJIA 35330 (-0,03%) OIL.WTI 82,03 (-0,51%) DAX 15490 (+0,01%) The Bank of England is seriously concerned about raising interest rates. On Sunday, its chairman&#8230;<\/p>\n","protected":false},"author":37,"featured_media":17595,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[6],"tags":[],"class_list":["post-18223","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What will happen to the pound? | Bernstein Bank<\/title>\n<meta name=\"description\" content=\"The Bank of England is seriously concerned about raising interest rates. 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