GBP/USD corrects to near 1.3400 from its weekly high

GBP/USD Price Forecast: 38.2% Fibo retracement acts as key barrier near 1.3470

The GBP/USD pair trades 0.2% lower to near 1.3400 during the late Asian trading session on Friday. The Cable faces selling pressure as the US Dollar Index (DXY) rebounds after an over-a-percent decline the previous day. As of writing, the USD Index is up 0.3% to near 99.45 after recovering from the weekly low of around 99.00 posted on Thursday.

The US Dollar (USD) fell sharply after a string of global central banks signaled that interest rate cuts have gone out of the picture, citing upside inflation risks amid rising oil prices due to conflicts in the Middle East. The Pound Sterling (GBP) gained sharply on Thursday after the Bank of England (BoE) held interest rates steady at 3.75%, with a clean majority. All BoE Monetary Policy Committee (MPC) members voted for an interest rate hold against estimates of 7-2. Read more…

GBP/USD surges after BoE’s unanimous pivot catches markets off guard

GBP/USD rallied nearly 1.3% on Thursday, climbing back above the 1.3400 handle to close around 1.3430 in a session defined by broad US Dollar weakness and a hawkish Bank of England (BoE) surprise. The pair opened near its lows close to 1.3250 before surging higher and tapping a key moving average at the session high near 1.3470. The move marks the strongest single-day rally in several weeks and partially unwinds the steep sell-off from the late-January high near 1.3870.

The Bank of England held rates at 3.75% as expected, but the unanimous 9-0 vote stunned markets that had positioned for a 7-2 split with two members favouring a cut. The previous decision in February was a narrow 5-4 hold, making Thursday’s swing to full consensus a significant hawkish shift. Governor Andrew Bailey warned the BoE “stands ready to act” if inflation becomes more persistent, and the Monetary Policy Committee (MPC) revised its Q3 inflation forecast sharply higher to around 3.5%, up from 2.0% in February, driven primarily by surging energy costs from the Iran conflict. MPC member Catherine Mann said her view had shifted toward a longer hold “or even a hike,” while even the traditionally dovish Swati Dhingra acknowledged rates may need to rise if oil disruption continues. Earlier in the session, UK employment data painted a mixed picture, with the ILO unemployment rate holding at 5.2% (beating the 5.3% forecast) and employment change coming in at 84K, though average earnings excluding bonuses slowed to 3.8% from 4.1%. Read more…

GBP/USD surges as BoE holds rates, hints inflation risks persist

GBP/USD surges during the North American session on Thursday after the Bank of England (BoE) held rates unchanged, citing high inflationary pressures spurred by the Middle East war. At the time of writing, the pair trades at 1.3356, up 0.76%.

The BoE opted to keep the Bank Rate at 3.75% because the Monetary Policy Committee (MPC) expects inflation to reach 3.5% over the next two quarters, according to the BoE staff. The central bank acknowledged that although an economic slowdown could push inflation lower, the biggest risk is inflation. Read more…