10 December 2021, GBP/USD
GBPUSD trading plan:
An investment banks poll of economists predicted the Fed would raise rates by 25 basis points to 0.25-0.50% in the third quarter of next year. However, most of them said the risk was that a hike comes even sooner. That shift in expectations for lift-off to Q3 from Q4 next year was driven by persistently higher inflation and now brings economists’ views almost in line with market pricing. The timing shift to the third quarter of next year was also underpinned by Fed Chair Jerome Powell saying the central bank would discuss in December whether to end its $120 billion in monthly bond purchases a few months sooner than anticipated. Previous expectations were for it to end in mid-2022. This is a positive signal for the dollar.
Investment idea: sell 1.3244 and take profit 1.3185.