CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Learn To Trade
 
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
 
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
Partnership
 
Affiliate Programme

Grow your business and get rewarded. Find out more about our Affiliate Programme today.

Learn more
Introducing Broker

ThinkMarkets ensures high levels of client satisfaction with high client retention and conversion rates.

Learn more
White Label

We supply everything you need to create your own brand in the Forex industry.

Learn more
Regional Representatives

Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets.

Learn more
Partnership

Plug into the next-gen platforms and the trades your clients want.

Partner Portal
About ThinkMarkets
 
Sponsorships

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more
Careers

Discover a range of rewarding career possibilities across the globe

Apply now
Security of Funds

Security of your funds is our number one priority. We safeguard our Client funds in top tier banks.

Learn more
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

GBP/USD set to break 1.40 handle despite recent dollar strength

Fawad Razaqzada Fawad Razaqzada 18/02/2021
GBP/USD set to break 1.40 handle despite recent dollar strength GBP/USD set to break 1.40 handle despite recent dollar strength
GBP/USD set to break 1.40 handle despite recent dollar strength Fawad Razaqzada
The pound is once again shining brightly in FX, with the GBP/USD climbing towards this year’s high of 1.3950ish hit a couple of days ago, with the 1.40 handle now just a spitting distance away. It is not just the cable - investors have been piling into the currency across the board. The EUR/GBP for example is hitting fresh-month lows, while the GBP/CHF has climbed above the 1.25 handle for the first time in before the pandemic.

Rallying pound holding back FTSE -- for now

Pound’s strength has held back the FTSE, but this only a temporary obstacle in my view as conditions remain ripe for UK-listed equities to join the global rally, with the Bank of England even entertaining the idea of negative interest rates, a hint that monetary policy will remain loose for years to come. 

Yields, yields, yields…

Like the US, bond yields in the UK have been rising, especially after a no-deal Brexit was avoided at the back end of last year. The UK is currently well ahead of many countries in the race to vaccinate its population. Together, these developments have boosted expectations that the UK economy could potentially recover quicker and stronger once lockdowns end.

US jobless claims eyed

The GBP/USD has largely shrugged off stronger US data, something which has supported the dollar against haven yen and gold. From the US we have had strong retail sales (+5.9% m/m vs. 1.1% expected), industrial production (0.9% m/m vs. +0.4% eyed) and Empire State Manufacturing Index this week. The focus will turn to jobs market, which remains very soft. Unemployment Claims are expected to print 775K later on versus a disappointing 793K reading the week before.

UK data in focus

From the UK, this week’s stronger-than-expect inflation data has further boosted the pound as rising price levels make it less likely that the BoE will go down the route of negative interest rates. On Friday, we will have the latest retail sales data as well as the flash manufacturing and services PMIs. So, we will have more clues about how the economy is coping during the ongoing lockdowns. But the markets are forward-looking and any softness in data during this lockdown will likely be shrugged off.

Cable set to break 1.40 barrier

The key question of course is can the GBP/USD hit the 1.40 handle next? I think it will. I think it is too close not to hit that hurdle now. Yes, the dollar is strong elsewhere, but the pound is equally as strong, if not stronger, than the USD. While some profit-taking is warranted if it gets to 1.40, the longer-term outlook continues to remain positive for the pound due to the above macro factors. Thus, in a few months we could be talking about 1.50s.

GBP/USD
Source: ThinkMarkets and TradingView.com
Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

Related articles:

RDDT soars: here are the levels to watch in c...

By Alejandro Zambrano

26/03/2024

Weekly Index Dividends

By ThinkMarkets

25/03/2024

Reddit Launches IPO: Can the Struggling Compa...

By Alejandro Zambrano

21/03/2024

Weekly Index Dividends

By ThinkMarkets

18/03/2024

Weekly Index Dividends

By ThinkMarkets

11/03/2024

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
Back to top