GBP price, news and analysis:
- GBP/USD, along with most of the financial markets, is unlikely to move far this session ahead of an expected speech by US President-elect Joe Biden on his plans to boost the US economy.
- A report has suggested that his fiscal stimulus package could be as large as $2 trillion.
- The markets are also waiting for a speech by Federal Reserve Chair Jerome Powell, listening out for any hints about when the Fed will start tapering its monetary stimulus program.
GBP/USD on hold ahead of Biden and Powell
GBP/USD and the rest of the financial markets are unlikely to move far this session ahead of a possible announcement by US President-elect Joe Biden of his plans to stimulate a US economy ravaged by the coronavirus pandemic. According to CNN, his aides have told their Congressional allies to expect a Covid-19 relief package with roughly a $2 trillion price tag.
In addition, the markets are looking ahead to a speech at 17:30 GMT by Federal Reserve Chair Jerome Powell, watching out for any hints at when the Fed will begin tapering its asset purchases. With no UK data scheduled, these events in the US will likely determine the next move in GBP/USD, which remains in its long-term trend higher.
GBP/USD Price Chart, Daily Timeframe (September 14, 2020 – January 14, 2021)
Source: IG (You can click on it for a larger image)
More generally, governments across Europe are currently tightening their coronavirus restrictions and the prospect of more stimulus in response to the economic pain caused by the pandemic, along with vaccination programs and rising yields on US Treasury notes and bonds, will likely continue to be the main drivers of the US Dollar and currency pairs such as GBP/USD.
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— Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.