Bank of England halts pound’s decline
August 4, 2023 10:23 amVideo
Latest News
- Video market update for April 23, 2024 April 23, 2024
- Trading Signals for EUR/USD for April 23-25, 2024: buy above 1.0681 (21 SMA – 3/8 Murray) April 23, 2024
- Analysis for the EUR/USD pair on April 23rd. Euro currency prepares for another decline April 23, 2024
- Analysis for the GBP/USD pair on April 23rd. Sellers failed to take the mark of 1.2313 on the first attempt April 23, 2024
- Technical Analysis – AUDUSD gears up after disappointing US PMIs April 23, 2024
- Technical Analysis – Meta stock falls below 50-SMA ahead of earnings April 23, 2024
- USD/JPY: Simple trading tips for novice traders on April 23rd (US session) April 23, 2024
- GBP/USD: Simple trading tips for novice traders on April 23rd (US session) April 23, 2024
- Technical Analysis – USDJPY fights with new 34-year high April 23, 2024
- EUR/USD: Simple trading tips for novice traders on April 23rd (US session) April 23, 2024
- Alphabet Q1 Earnings: Strong ad business but AI initiatives lag – Stock Markets April 23, 2024
- GBP/USD: trading plan for the US session on April 23rd (analysis of morning deals). The pound continues to decline April 23, 2024
- EUR/USD: trading plan for the US session on April 23rd (analysis of morning deals). The euro has shown rapid growth April 23, 2024
- EUR/USD. April 23rd. Bulls and bears are in balance April 23, 2024
- GBP/USD. April 23rd. The bears continue to attack April 23, 2024
- Gold edges lower as Middle East tensions ease April 23, 2024
- Slightly lower volatility across the board ahead of key US data – Volatility Watch April 23, 2024
- Technical Analysis – UK 100 index hits new all-time highs but rally may be cooling April 23, 2024
- XM Teams up with ‘Charity Right’ for Change April 23, 2024
- Technical Analysis – US 500 index rebounds off 2-month low below 5,000 April 23, 2024
During the press conference, Bailey pointed out recent inflation data, which prompted policymakers to raise rates by only 25 basis points, clarifying that it does not mean the regulator will halt rate increases. Notably, the US Federal Reserve and the European Central Bank had already signaled the possibility of ending their aggressive policies a week earlier. “I’m being more cautious because, frankly, we are still seeing some surprises in the news, and I think we need to get ourselves onto a more settled path,” Bailey said.
The Monetary Policy Committee voted 6 to 3 in favor of raising rates by a quarter point, marking the 14th consecutive increase. Two committee members wanted a 50-basis-point rate hike, while one voted for no change. In June, policymakers voted 7 to 2 in favor of a 50-basis-point rate hike as a response to stubborn inflation and robust labor market indicators. “We’ve seen some quite big surprises in recent months,” Bailey said, citing “frankly unwelcome surprises” in June.
Since then, inflation has shown signs of cooling. The overall consumer price inflation declined to 7.9% in June from a higher-than-expected 8.7% in May. However, core inflation, which excludes volatile prices of energy, food, alcohol, and tobacco, remained unchanged at 6.9% on an annual basis, only slightly lower than May’s reading of 7.1%.
Bank of England also updated its inflation forecast, stating that it now expects prices to drop to 4.9% by the end of this year, a faster decline than anticipated in May. The report also mentioned that inflation will return to the target of 2% only in 2025.
Regarding future regulatory steps, Bailey noted that policymakers would continue to rely on actual data, emphasizing that there were numerous possible paths to achieving the target.
As for the GBP/USD pair, the pressure on the pound eased after the Bank of England’s decision, and the situation is now relatively stable. Counting on strengthening can only happen after gaining control above 1.2735, which still needs to be reached. A return to this level may reinforce hope for a recovery toward 1.2780, after which a more significant upward move toward 1.2840 can be considered. In case of a decline in the pair, bears are likely to attempt to take control below 1.2680. If they succeed, this may strike a blow to bullish positions and push the GBP/USD pair towards the low of 1.2630 with a prospect of reaching 1.2590.
Regarding the EUR/USD pair, the pressure on the euro has intensified. Bulls need to climb above 1.0960 to maintain control of the market. This may pave the way to 1.1015. From this level, a move to 1.1060 is possible, but doing so without support from big traders will be quite challenging. In case of a decline in the trading instrument, large buyers may return to the market near 1.0910. If no support is seen there, it would be good to wait for an update of the low at 1.0870 or open long positions from 1.0835.
The material has been provided by InstaForex Company – www.instaforex.com
Related Posts: