GBP/EUR: Monday 9:00 UTC 27th September: 1.17224
The Bank of England meeting midweek repaired the damage caused earlier in the week as the GBP/EUR looked like it was heading below 1.16. Despite the Bank making the decision to hold interest rates at the record low level of 0.1%, they hinted on Thursday that interest rates could rise before the Bank completes its bond-buying scheme. Meanwhile, Britain are currently facing a potential fuel crisis after a shortage of truck drivers prompted panic buying. Looking ahead, German election results are showing an end to Angela Merkel's party power, with the Social Democrats winning the biggest share of the vote on Sunday. The Pound has some opportunity now to propel forward over the coming weeks. Long-term, Goldman Sachs have revised forecasts and believe 1.19 is possible by the end of Q1 2022.
GBP/USD: Monday 9:00 UTC 27th September: 1.37036
GBP/USD has been pressured over the last few days as a truck driver shortage has threatened a fuel crisis in the UK. The UK government is set to suspend competition laws between firms to help get fuel to parts of the country, whilst also issuing 5,000 temporary visas for foreign lorry drivers to help ease the problem. Thankfully for the Pound, the Bank of England's recent hawkishness and upbeat market mood has kept it afloat, with talks of interest rate hikes becoming a reality in the near future. On the other hand, the Federal Reserve seem very dovish, with analysts continuing to critique their inactivity. The markets will not act until the Fed does, with it now seeming very likely that the BoE will hike rates at least once before the Fed moves, possibly even twice.
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