GBP/USD Forecast: Buyers shy away, eyes on BoE policy decisions
GBP/USD has retreated below 1.2600 early Thursday after having reached its highest level in a year at 1.2680 on Wednesday. The pair’s near-term technical outlook points to a bearish tilt as focus shift to the Bank of England’s (BoE) policy announcements.
On Wednesday, the US Dollar (USD) came under selling pressure after the data from the US showed that Consumer Price Index (CPI) rose 4.9% on a yearly basis in April, compared to the market expectation of 5%. The cautious market stance, however, didn’t allow GBP/USD to preserve its bullish momentum. Read more …
GBP/USD edges lower ahead of BoE meeting
The Bank of England is expected to raise rates today for a 12th consecutive time, with a 25-basis point hike. This would bring the benchmark cash rate to 4.50%. The BoE can’t be faulted for not being aggressive, but it failed to react to rising inflation fast enough and has found itself playing catch-up with inflation. In March, CPI dipped but remained in double digits, at 10.1%. This has led to a severe cost-of-living crisis and the BoE has little choice but to continue raising rates until it is clear that inflation is on a downswing.
The BoE remains optimistic and projected in February that inflation would fall to 3% within 12 months. This may be a bit of a stretch but I expect inflation to fall more quickly as the rate hikes make themselves felt and cool economic activity. Read more …
GBP/USD bounces off multi-day low, climbs back to 1.2600 after BoE’s 25 bps lift-off
The GBP/USD pair recovers a few pips from a four-day low touched this Thursday and bounces back above the 1.2600 round-figure mark after the Bank of England (BoE) announced its policy decision.
As was widely expected, the UK central bank raised its benchmark interest rates for the 12th time in a row, by 25 bps to 4.50%. In the accompanying monetary policy statement, the BoE indicated that persistently high inflationary pressures would require further tightening. This, in turn, underpins the British Pound and assists the GBP/USD pair to stall the overnight retracement slide from the 1.2680 region, or its highest level since April 2022. Read more …
