GBP/USD ANALYSIS 17-MAR-21
During the day, the quotes fell by almost 100 points. The pound is experiencing short-term pressure due to unexpectedly weak macroeconomic data from the industry. Bank of England Governor Andrew Bailey said on Tuesday that UK inflation will remain below the 2% threshold. Bailey also noted that the country's economy in the first quarter will fall by 12% by 2019 and by 4% by 2020. The pound is likely to be vulnerable against the dollar in the near future, and the current levels look high enough to open short positions.
Meanwhile, Bank of America notes that the FOMC monetary policy meeting tonight will be one of the most important events for the regulator in a long time. Fed Chairman Jerome Powell will have to strike the right balance between being more optimistic about the outlook and predicting market reaction. The result will be a recognition that an interest rate hike may happen earlier than the forecasts of the last meeting, but still later than the markets currently believe. The March FOMC meeting is likely to focus on higher interest rates and weak economic performance. The US currency as a whole will benefit from high rates, so the pair will also be subject to pressure in the medium term.