- Hawkish BoE says: “ongoing tightening" will likely "be appropriate”.
- “Two rate hikes "priced in” according to ING.
The GBP/JPY is trading at around 149.17 down 0.53% on Thursday as traders seem to have bought the rumor and sold the fact. The market deemed there was no groundbreaking news from the BoE, at least no news that would warranty to buy more GBP just now.
As expected, the Bank of England meeting ended up with interest rates unchanged on Thursday, but surprised the markets with a 7-2 voting, as two MPC members voted for a rate increase.
The odds for a May rate hike got higher as the February Inflation Report said that “monetary policy would need to be tightened somewhat earlier and by a somewhat greater extent over the forecast period than (previously) anticipated.” Both Ian McCafferty and Michael Saunders voted for a 25bp rate hike in March, which means that the rate hike can soon be on the cards.
The monetary policy statement in March said: “ongoing tightening of monetary policy over the forecast period will be appropriate to return inflation sustainably to its target at a more conventional horizon.”
The BoE didn’t comment on the Brexit transition period however it said that it sees the whole Brexit process has “the most significant influence on uncertainty.”
Here is a Brexit timeline as seen by ING based on the European Commission data.
What could reinforce the Yen is Trump restricting Chinese investment and put tariffs on $50B in Chinese imports for stealing technology.
GBP/JPY daily chart:
Strong resistance is seen at the 150.00 handle with the 55 and 100-period simple moving average seen 70 pips higher. The market found support at the 200 DMA close to 148.00 while it is now trading back into yesterday’s range.
GBP/JPY 1-hour chart:
Today’s selloff was quite sharp. Resistance is seen at 149.50 previous supply zone followed by the 150.00 psychological figure. Intraday support is seen at 148.50, the 200 SMA. If the level is broken to the downside the next scaling point is likely seen at 147.00, the last swing low.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0700 ahead of key US data
EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays above 156.00 after BoJ Governor Ueda's comments
USD/JPY holds above 156.00 after surging above this level with the initial reaction to the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold price oscillates in a range as the focus remains glued to the US PCE Price Index
Gold price struggles to attract any meaningful buyers amid the emergence of fresh USD buying. Bets that the Fed will keep rates higher for longer amid sticky inflation help revive the USD demand.
Sei Price Prediction: SEI is in the zone of interest after a 10% leap
Sei price has been in recovery mode for almost ten days now, following a fall of almost 65% beginning in mid-March. While the SEI bulls continue to show strength, the uptrend could prove premature as massive bearish sentiment hovers above the altcoin’s price.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.