Bank of England has not helped the pound to return to growth

Expert market comment from Alex Kuptsikevich of the FxPro Analyst Team: Bank of England has not helped the pound to return to growth
FxPro | il y a 928

Bank of England has not helped the pound to return to growth

If you want to see how important interest rate expectations are to FX, look at the reaction of the Pound and the Dollar after their central bank meetings. The Bank of England raised rates by 75 points on Thursday, repeating a similar move by the Fed less than a day earlier. In both cases, we heard warnings about the growing chances of a recession and, against all odds, the intention to proceed with a hike.

The fundamental difference, in our view, was that the Fed made it clear yesterday that the final rate would be higher than expected. The markets were expecting to see a peak rate near 4.75%-5.00%. And now they are leaning towards the upper end of that range. At least, that is the interpretation that prevails in the media now.

The Bank of England, on the other hand, has warned that a peak rate could be lower than the current market expectation of 5.25%. This was enough to take another 0.8% off GBPUSD, bringing the overall decline to 3.5% from the peak after the Fed's comments at 1.1560 to the bottom at 1.1160.

Last week the GBPUSD strengthening stalled on the rise above 1.1600. Yesterday's drop broke the pair's nascent upward trend, potentially depreciating it to a rebound within a down-trend.

By the FxPro Analyst Team

Réglementation: FCA (UK), SCB (The Bahamas)
read more
ATFX Market Outlook 19th May 2025

ATFX Market Outlook 19th May 2025

Despite a sharp decline in consumer sentiment, U.S. stocks extended gains on Friday, supported by optimism over the recent U.S.-China tariff truce. The University of Michigan survey showed May confidence fell to a three-year low, while 12-month inflation expectations surged to their highest since 1981.
ATFX | il y a 21h 16min
ATFX Market Outlook 16th May 2025

ATFX Market Outlook 16th May 2025

U.S. retail sales increased at a much weaker rate in April as the pre-tariff scramble to purchase automobiles exhausted itself and shoppers trimmed other spending in the face of growing economic uncertainty. In addition, Federal Reserve Chairman Jerome Powell stated the Fed needs to reconsider its existing employment and inflation paradigm within monetary policy.
ATFX | il y a 3
US 100, EURUSD, GBPUSD

US 100, EURUSD, GBPUSD

US-China trade talks send Wall Street sharply higher; US CPI on calendar; EURUSD tumbles ahead of Eurozone GDP; US-UK trade deal and UK GDP in focus; GBPUSD below 1.3200
XM Group | il y a 7