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GBP and USD bolstered by FOMC and BoE – Danske Bank

FXStreet (Edinburgh) - Senior Analyst Flemming Nielsen at Danske Bank reviewed the recent performances of the greenback and the sterling.

Key Quotes

The GBP strengthened yesterday and the USD rallied overnight, following the releases of the minutes from the two central banks, BoE and Fed”.

“Both were hawkish in the sense that there is a growing split in the committees: BoE minutes showed a split vote of 7-2 for keeping interest rates unchanged with the two members voting against actually advocating an increase in rates”.

“The Fed minutes showed a growing split in the committee as ‘many’ members now seem to be on the hawkish side, which is more than the ‘few’ that previously advocated a more hawkish stance”.

“All in all, both minutes seem to confirm that rate increases are moving closer in both countries”.

“While the timing of the rate increases remains uncertain, a growing split in the committees indeed supports our view that EUR/USD and EUR/GBP will continue to gradually move lower in the coming 12 months driven by relative monetary policy”.

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