The Pound extended on its recovery throughout the week across the board, with major GBP pairs testing key psychological levels. While the weakness in the greenback post-FOMC played a large part in the bounce for GBP/USD, bond spreads have also moved in favour for Cable. As was widely expected, the Fed meeting did little to rock the boat and largely stuck to the script, albeit with some subtle changes. That said,my view remains that some taper excitement can be expected at the next month’s Jackson Hole Symposium, a rather fitting time as it would mark the anniversary of the announcement of average inflation targeting.
