Evergrande Uncertainty Hovers as GBP/USD Price Drops from 1.3750

After a significant spike the previous day, the GBP/USD price stabilized throughout Friday's Asian session. The pair gained more than 150 pips from its monthly low of approximately 1.3600 in reaction to optimism about the Bank of England's (BOE) unexpectedly hawkish stance on Super Thursday.

The GBP/USD pair opened down on Friday but rapidly recovered to record an intraday high of 1.3736 before losing steam.

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The British pound rose versus the dollar and the euro following the Bank of England's (BOE) monetary policy pronouncement on Thursday, which held rates constant at 0.1 percent but warned of increasing inflation. Dave Ramsden and Michael Saunders, two members of the Monetary Policy Committee (MPC), voted to eliminate the pandemic-era incentives as quickly as practicable.

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Despite indicators that the global economy is weakening, European markets rebounded for the third day in a row yesterday, ignoring earlier concerns over the Chinese property market.

The FTSE100 did its best to follow its partisan role, dropping from intraday highs and ended in the red, which might be attributed in part to the pound's and gold's rise. Even though it appeared implausible on Monday as investors withdrew from Evergrande's insolvency, European and US markets have rallied this week.

Despite a strong spike in yields, which caused US 10-year bonds to record a three-month high and UK 10-year bonds to hit nearly their peak in more than two years, the stock market rose.

The Asian markets were unsettled this morning as the US Evergrande payment deadline passed without indicating when or if it would happen. Today, the S&P 500, Nasdaq, and Dow finished above their 50-day moving averages. Before a default is notified, a grace period of at least 30 days will begin, with Chinese officials requesting that the company avoid default. In the meantime, bond payments must be made during this time.

The GBP/USD gave up some of its gains after hitting a multi-week high of 1.3750 yesterday. The price, however, is still in the positive zone. While the volume is drying up, the price is now consolidating. It indicates that the positive trend will continue. The bulls can consider 1.3750 as a target ahead of the 1.3800 mark.

On the other hand, the pair may find support at 1.3700, then 1.3660, and finally 1.3600.

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