GBP/USD retreats from 1.3760 to 1.3710 despite increasing bets of a BoE’s hike rate


  • The British pound declines despite BoE’s Governor Bailey hawkish comments.
  • The market sentiment is downbeat, as European stocks print losses, like US stocks, except for the Nasdaq.
  • BoE’s Andrew Bailey said that central banks need to prevent higher inflation expectations from becoming permanent.

The British pound is sliding during the New York session, down some  0.23%, is trading at 1.3712 at the 2time of writing. Surging energy prices, higher inflationary pressures witnessed on the last CPI readings in developed country’s economies, and central banks tightening monetary policy dented the market sentiment.
Significant European equity indexes record losses between 0.45% and 0.85%, while in the US, most of the indexes, except for the heavy-tech Nasdaq, edge lower between 0.02% and 0.22%.

In the meantime, the US Dollar Index, a basket that measures the performance of the US dollar against six peers, advances 0.04%, sits at 93.99, underpinned by US T-bond yields rising, with the 10-year note up one basis point, at 1.586%.

Bank of England Governor Andrew Bailey reinforces that the central bank will take measures to tackle inflation

Over the weekend on a panel organized by the Group of 30, Bank of England (BoE) Governor Andrew Bailey said that while the central banks don’t have the tools to counter supply disruptions, officials need to prevent higher inflations expectations from becoming permanent.

Furthermore, Bailey added that rising energy prices mean inflation will be last longer than expected. Additionally said that “we, at the Bank of England, have signaled, and this is another signal, that we will have to act. But of course, that action comes in our monetary policy meetings.”

That said, since October 9, when BoE’s members Michael Saunders and Andrew Bailey expressed concerns about inflation and the central bank reaction, the British pound rallied from 1.3567 to 1.3772, on investors’ expectations, that an interest rate hike is on the cards.

Putting this aside for a moment, in the UK, the economic docket featured the Rightmove House Price Index for October, which expanded 1.8% and 6.5% on a monthly and annual basis, respectively, higher than the previous reading. On the US front, Industrial Production (IP) contracted 1.3%, worse than the 0.2% expansion estimated by economists. Further, Capacity Utilization followed the IP footsteps, falling from 76.2% in August to 75.2% in September.

GBP/USD  KEY ADDITIONAL LEVELS TO WATCH

Overview
Today last price 1.3712
Today Daily Change -0.0032
Today Daily Change % -0.23
Today daily open 1.3744
 
Trends
Daily SMA20 1.3617
Daily SMA50 1.3719
Daily SMA100 1.382
Daily SMA200 1.3846
 
Levels
Previous Daily High 1.3773
Previous Daily Low 1.3668
Previous Weekly High 1.3773
Previous Weekly Low 1.3568
Previous Monthly High 1.3913
Previous Monthly Low 1.3412
Daily Fibonacci 38.2% 1.3733
Daily Fibonacci 61.8% 1.3708
Daily Pivot Point S1 1.3683
Daily Pivot Point S2 1.3623
Daily Pivot Point S3 1.3578
Daily Pivot Point R1 1.3789
Daily Pivot Point R2 1.3834
Daily Pivot Point R3 1.3894

 

 

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