GBP/USD outlook: Cable loses traction after upside rejection, little help from upbeat UK retail sales
Cable is standing at the back foot in early Friday’s trading after hitting new highest since early February on Thursday but failing to sustain post-BOE gains. The Bank of England raised its interest rates by 25 basis points, in line with expectations, after unexpected inflation rise in February shifted earlier 50/50 split on rate outlook, to decision for 0.25% hike.
However, BOE’s 7/2 vote split and subsequent comments, in which policymakers said that further hikes would directly depend on evidence of more persistent pressure, were mainly seen by markets as dovish. Read more...
GBP/USD Forecast: Pound Sterling could retreat to 1.2200
GBP/USD has lost its bullish momentum and retreated to the 1.2250 area early Friday after having closed below 1.2300 on Thursday. The technical picture suggests that the pair could extend its correction in the short term. Moreover, the negative shift witnessed in risk sentiment is likely to help the US Dollar keep its footing ahead of the weekend.
The Bank of England (BOE) announced on Thursday that it raised its key rate by 25 basis points to 4.25% as expected. Only two members of the MPC voted in favor of keeping the rate unchanged at 4%. In the policy statement, "If there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required," the BOE reiterated. Read more...
GBP/USD corrects further from multi-week high, drops closer to 1.2200 on weaker UK PMIs
The GBP/USD pair comes under heavy selling pressure on the last day of the week and retreats further from its highest level since early February, around the 1.2340-1.2345 region touched on Thursday. The selling bias remains unabated through the first half of the European session and drags spot prices back closer to the 1.2200 mark in the last hour.
A fresh wave of the global risk-aversion trade - as depicted by a sharp intraday fall in the equity markets - assists the US Dollar (USD) to gain strong follow-through traction on Friday and build on the previous day's goodish rebound from a seven-week low. This, in turn, is seen as a key factor weighing heavily on the GBP/USD pair. Read more...
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