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Forex pairs in this Article » GBP/USD (Barcelona) - Jonathan Pryor, Corporate Treasury Analyst at Investec notes that the pound continues to trade strongly as the strengthening UK recovery may possibly see policy divergence going forward between the UK, US and Euro-area.

Key Quotes

“While the Euro-area and US are still sounding dovish, the BoE have brought forward expectations of reaching their 7% unemployment threshold and potentially normalising rates.”

GBPUSD came close to 1.6200 overnight and we are now close to the 2013 highs at 1.6260 with a break and close above these potentially signalling a move to 1.6500.”

“The Fed’s Bullard spoke yesterday and said accommodative bond-buying must continue for now despite possible inflation risks in part because there are no signs of price pressures so far, with inflation remaining subdued.”

“The improving labour market however seemed to spur stocks as The Dow closed above 16,000 for the first time. Whilst the timing of tapering remains unclear, until the next jobs report at least, investors are growing ever more confident that the market will shrug off the pull back in stimulus.”
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