- EUR/GBP has gauged an intermediate cushion around 0.8810 as BoE claims rapid inflation softening ahead.
- The BoE announced a 25 bps rate hike and pushed rates to 4.25% despite fears of banking turmoil.
- ECB Knot is in favor of further rate hikes in May as inflation is showing no signs of abating.
The EUR/GBP pair has found an intermediate cushion around 0.8810 in the early Tokyo session. Earlier, the cross witnessed a sell-off after the Bank of England (BoE) announced an eleventh consecutive rate hike to sharpen its tools in the battle against double-digit inflation. BoE Governor Andrew Bailey announced a rate hike by 25 basis points (bps) and pushed rates to 4.25%.
The asset is expected to deliver more weakness ahead as the street believes that the United Kingdom (UK) inflation is extremely stubborn and will take plenty of time to get contained. The BoE has come a long way by hiking rates to 4.25% and the annual inflation is still in the double-digit figure, showing no evidence of softening ahead.
On Wednesday, the UK Office for National Statistics reported a surprise jump in the headline Consumer Price Index (CPI) to 10.4% while the street was anticipating a decline to 9.8%. BoE stated that the surprise upside was mainly the impact of less often volatile clothing prices, which won’t last long.
The central bank is very much confident that inflation will start decelerating rapidly from the second quarter. However, the labor shortage and higher food prices might continue to keep inflation at elevated levels. For further guidance, investors will focus on the Retail Sales data, which is expected to contract by 4.7% on an annual basis.
On the Eurozone front, European Central Bank (ECB) policymaker Klaas Knot said that the ECB is unlikely to be done with rate hikes and added that they still think that they need to raise the policy rate in May. Investors should be aware that the ECB hiked rates by 50 bps last week. No doubt, more hikes must be in pipeline as ECB President Christine Lagarde has been reiterating that higher inflation would stay for a longer period.
|Today last price||0.882|
|Today Daily Change||-0.0032|
|Today Daily Change %||-0.36|
|Today daily open||0.8852|
|Previous Daily High||0.8854|
|Previous Daily Low||0.8772|
|Previous Weekly High||0.8864|
|Previous Weekly Low||0.8718|
|Previous Monthly High||0.8979|
|Previous Monthly Low||0.8755|
|Daily Fibonacci 38.2%||0.8823|
|Daily Fibonacci 61.8%||0.8803|
|Daily Pivot Point S1||0.8798|
|Daily Pivot Point S2||0.8744|
|Daily Pivot Point S3||0.8716|
|Daily Pivot Point R1||0.888|
|Daily Pivot Point R2||0.8908|
|Daily Pivot Point R3||0.8962|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
EUR/USD drops toward 1.0650 ahead of German inflation data
EUR/USD is falling toward 1.0650 in European trading. Dismal China's Manufacturing PMI and pre-US debt deal vote anxiety support the safe-haven US Dollar while markets pare ECB rate hike bets after softer French inflation data. German inflation data, Fedspeak and US House vote eyed.
GBP/USD extends losses toward 1.2350 amid firmer US Dollar
GBP/USD is extending losses toward 1.2350 in the European session. Markets stay jittery amid China growth worries and ahead of the US House vote on the debt deal. Hawkish Fed's Mester underpins the ongoing US Dollar upsurge. More Fedspeak in focus.
Gold price rebound eyes $1,990 and US factors
Gold Price picks up bids to refresh intraday high as buyers cheer a two-day winning streak, after refreshing the lowest levels in 10 weeks. In doing so, the XAU/USD fails to justify the latest rebound in the DXY but aptly cheers the downbeat Treasury bond yields.
BTC bulls recovery plan targets $30,000 as bears exhaust
Bitcoin action slows down, allowing bears to doubt their strength. As more time elapses, the chances of bulls taking over control of BTC become more likely. A spillover effect would be noticeable in Ethereum and Ripple prices.
Risk off flow into month end
We had warned against the market wanting to get overly excited about the news of a US debt ceiling deal that was always going to get done. And now that this reality is coming to fruition, it’s back to focusing on the market drivers where investors need to focus.