The Pound is correcting. Overview for 27.09.2022

The Pound Sterling rebounded from the “bottom” against the USD. The current quote for the instrument is 1.0799.

Now it can be said that all the market reactions relating to the Pound were caused by the £45-billion tax cut package announced earlier by the British government to help the country’s population and companies. The package is expected to be the biggest in the last 50 years, financed from selling government bonds.

The Bank of England, which is now often accused of doing nothing, said that it was monitoring the current market conditions and was ready to raise the benchmark interest rate it necessary. So, what else must happen to make the conservative British regulator start revising its monetary policy?

The United Kingdom won’t offer many numbers this week, but its monetary policymakers are ready to deliver speeches every day. Their comments are highly unlikely to provide the Pound with any significant support – there are already too many words in prices.

Interesting reports will be released on Friday: the final Q2 GDP report, which is not expected to offer any surprises. The British economy might drop 0.1% q/q in April-June. If the actual and expected readings are close, the Pound won’t respond to them.