Pound Falls Against Dollar for Second Session on Dovish BoE Speeches

The Sterling pound fell against the resurgent dollar on February’s last trading day as institutional money managers rebalanced their portfolios to close the month. The GBP/USD currency pair fell for the second consecutive day as the dollar surged higher amid concerns that too much stimulus could be bad for the British economy.
The GBP/USD currency pair fell from a high of 1.4022 in the Asian market to a low of 1.3887 in the mid-London session but was off these lows at the time of writing.
The currency pair traded with a bearish tone from the start of today’s session, driven by sour market sentiment as traders took profits on their bullish positions. Dovish comments from the Bank of  England Governor, Andrew Bailey, who said that he expects Britain’s economy to contract during Q1, but not as much as last spring drove the pair lower. Similar comments from the BoE’s chief economist Andy Haldane also contributed to the pair’s overall weakness. Haldane cautioned that too much stimulus might trigger higher inflation as the economy recovered due to the UK’s successful vaccine rollout.
The release of the upbeat US personal consumption expenditure report for January released by the Bureau of Economic Analysis had a muted impact on the cable. The greenback’s rally, as tracked by the US Dollar Index, which hit a high of 90.77, was responsible for most of the pair’s losses.
The currency pair’s performance over the upcoming weekend is likely to be affected by geopolitical events.
The GBP/USD currency pair was trading at 1.3935 as at 13:55 GMT after falling from a high of 1.4022. The GBP/JPY currency pair was trading at 148.18, having dropped from a high of 149.02.
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Original from: www.earnforex.com