GBP/JPY: Bid at 17-day highs amid mounting BOE rate cut bets
|- GBP/JPY is trading at one-month highs above 144.00.
- The cross is gaining altitude despite market pricing BOE rate cut.
- Yen sell-off continues to push GBP/JPY higher.
GBP/JPY is trading at 17-day highs in Asia despite Bank of England (BOE) interest rate cut bets continuing to rise in reaction to the latest UK data.
The pair is currently trading around 144.10, having hit a high of 144.17 soon before press time. That was the highest level since Dec. 31.
Rate cut bets
Traders ramped up bets for the BOE to lower rates in January following the release of weaker-than-expected inflation data earlier this week.
As of Thursday, markets were pricing in a more than 60% chance of a cut in January, up from 44% on Tuesday.
Even so, GBP/JPY is pushing higher. The pair has risen by more than 300 pips since bottoming out at 140.82 on Jan. 6.
The JPY cross has benefitted from the rise in USD/JPY, which is now trading at 110.22, the highest level since May 2019.
Also, GBP/USD has added more than 100 pips in the last three days, helping GBP/JPY gain altitude.
Market running ahead of itself
Bank of New York Mellon and Nomura International think the market has run ahead of itself in pricing a rate cut from the BOE.
A number of surveys suggest that optimism has picked up since the December elections and the central bank may wait for stronger evidence of slowdown before cutting rates, Bank of New York Mellon strategist said, according to Bloomberg.
Technical levels
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