EUR/GBP falls to over 2-week lows post-BoE announcement

Haresh Menghani FXStreet

• BoE decides to hikes interest rates by 25bps to 0.75%.
• A unanimous vote provides a minor boost to the GBP.

The EUR/GBP cross extended its retracement slide from the 0.8900 neighborhood and dropped to over two-week low after the latest BoE monetary policy update.

As was widely expected and already priced in the market, the Bank of England raised its key lending rate by 25 basis points to 0.75%. However, a unanimous vote (9-0) might have surprised market participants and provided a minor bullish lift to the British Pound.

This coupled with a heavily offered tone around the EUR/USD major exerted some additional downward pressure and further collaborated to the ongoing downfall to mid-0.8800s.

Further downside, however, seemed limited, at least for the time being, as investors look forward to the BoE's Quarterly Inflation Report and the BoE Governor Mark Carney's comments at the post-meeting presser.

Technical levels to watch

A follow-through selling below 0.8840 immediate horizontal support has the potential to continue dragging the cross further towards testing the 0.8800 handle. On the flip side, 0.8875 level, followed by the 0.8900 handle might now act as immediate resistance levels, above which the cross could aim back towards 0.8955-60 supply zone.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

GBP/USD surges to multi-day peaks past 1.3250

GBP/USD leaves behind Friday’s small pullback and advances past 1.3250 level, or five-day highs, on Monday. Cable’s upside follows extra losses in the Greenback, while traders continue to assess the geopolitical front and upcoming key events.

EUR/USD picks up extra pace north of 1.1400

EUR/USD extends its recovery past 1.1400 the figure as the NA session draws to a close on Monday. Indeed, the pair advances for the third straight day amid the persistent offered bias in the US Dollar. Meanwhile, market participants keep gearing up for the ECB Forum in Sintra and the release of critical US labour market data.

Gold struggles to attract investors

Gold remains under marked selling pressure, holding on just above the key $4,000 mark per troy ounce at the beginning of the week. The precious metal reverses two daily advances in a row as renewed effervescence in the Middle East revive inflation concerns and bolster Fed rate hike expectations.

Strategy unveils plan allowing Bitcoin sales to fund stock buybacks, dividends and reserves

Strategy (MSTR) has unveiled a Digital Credit Framework to strengthen the company’s financial standing. Under the new framework, the world’s largest corporate holder of Bitcoin (BTC) will pivot from its previous accumulation strategy, opting to sell BTC in order to boost liquidity, fund dividend payments, execute stock buybacks, and strengthen cash reserves.

Just like Fed, is BoJ’s independence under threat?

When talking about central bank independence, most of the focus has been on Donald Trump’s pressure on the Federal Reserve. But a similar story, a quieter one for now, seems to be happening on the other side of the Pacific: Japan’s government may be testing the Bank of Japan’s independence.

Kevin Warsh isn't expected to say much in Sintra: That's exactly why markets will listen

Financial markets could find an important catalyst in the enchanting, fairytale-like landscape of Sintra this week. The ECB Forum will, as it does every year, gather the crème de la crème of central banks. The new boss at the Fed, who has clearly said that the Fed should stop explaining everything, will need to talk – and traders should listen.