GBP/USD Price, Chart, and Analysis
The UK central bank raised interest rates by 25bps today to 0.75%, pushing borrowing costs back to pre-pandemic levels. The committee voted 8-1 for the move with one member preferring to maintain the bank rate at 0.5%. The BoE now expects inflation to reach 8% in Q2, ‘and perhaps even higher later this year’. The UK central bank also believes that developments since the February Report - the Ukraine crisis – will have an ‘adverse impact on activity by intensifying the squeeze on household’. It looks like the BoE is pushing back against aggressive money market rate hike predictions, giving the release a more dovish overtone.
The Federal Reserve Bank began hiking interest rates at yesterday’s FOMC[3] meeting, raising rates by 25 basis points, the first move higher by the Fed since late 2015. Financial markets are now expecting the Fed to increase rates by 25bps a further six times this year with four more rate hikes seen in 2023.
FOMC Hikes – USD Spikes, SPX Snaps, Bring on The Presser.[4]
For all market-moving economic data and events, refer to the DailyFX calendar[5]
Today’s decision disappointed traders who had bid GBP[6]/USD[7] up to 1.3200 just before the announcement. Cable is now pushing down on 1.3100
Becoming a Better Trader – Fixing Mistakes, Working on Weaknesses.[8]
GBP/USD 3 Minute Price Chart – March 17, 2022
Retail trader data show 73.68% of traders are net-long with the ratio of traders long to short at 2.80 to 1. The number of traders net-long is 5.08% lower than yesterday and 8.44% higher from last week,
