Today, on June 13th, the British Pound is trading higher against the US Dollar. Since the Asian session, the currency pair already gained 0,87% after the Governor of the Bank of England announced made a speech on Thursday to say that the central bank may well raise interest rates earlier than expected.
The Governor also told the audience that the declining rate of unemployment coupled with active economic growth is nearing the time when the BoE starts raising interest rates. At the same time, the borrowing costs in the UK have been at record lows for 5 years.
It should be noted that the current key rate of 0,5% is at the lowest level in 320 years! Market participants used to expect the first rake hike in February 2015. However, yesterday's speech made by Carney is likely to reorient the market expectations towards late 2014. If the interest rate hike is the case in late 2014, the Bank of England will be the first major central bank to toughen its monetary policy since the 2008-2009 global crisis.
At the same time, several IMF officials confess that they underestimated the prospects of the UK economic growth. This may well be the fastest-growing economy among the G7.
GBPUSD
Masterforex-V Academy analyzed the H4 chart of GBPUSD to find out that the current bias is bullish, which means that the British Pound may continue its rally against the US Dollar amid stronger-than-expected economic figures coming from the UK.
The recent sharp rally seen yesterday after Carney's speech may resume today to exceed the multi-year high located at 1,6995. The price used to be consolidating within the scope of the 1,6692-1,6845 range. Then the price made a strong upswing – over 120 pips.
At this point, the price is trading higher and close to 1,6995, which is followed by the psychological level of 1,700.
Alternatively, the closest level of support for GBPUSD is at 1,6801. The price may retrace down to 1,6920 and 1,6881. If the price goes below 1,6845, the bullish prospects will be delayed.
