GBP/USD regained positive traction on Wednesday amid subdued USD demand.A positive risk tone was seen as a key factor weighing the safe-haven greenback.
BoE rate hike bets remained supportive, though geopolitical risks might cap gains.The GBP/USD pair maintained its bid tone through the early European session and was last seen hovering near the top end of its daily trading range, around the 1.3600 mark.
The pair built on the previous day’s late rebound from the multi-day low, around the 1.3540-1.3535 area, and gained some positive traction on Wednesday amid subdued US dollar demand. Despite the recent geopolitical developments, the fact that new economic sanctions on Russia were not as bad as feared helped ease the nervousness over the situation in Ukraine. This was evident from a generally positive tone around the equity markets, which undermined the greenback’s relative safe-haven status and acted as a tailwind for the GBP/USD pair.
The British pound also drew support from hawkish comments by the Bank of England (BoE) Deputy Governor Dave Ramsden, saying that some further tightening is likely to be appropriate in the coming months. This reinforced expectations for additional interest rate hikes by the BoE. In fact, investors are pricing in another rate hike at the next scheduled BoE meeting that concludes on March 17. This was seen as another factor behind the GBP/USD pair’s intraday move up. That said, the upside seems limited amid rising geopolitical tensions.
EUR/USD stretches higher toward 1.1350 as dollar loses interest.EUR/USD continues to edge higher during the European session on Wednesday and trades near mid-1.1300s. The risk-positive market environment is making it difficult for the greenback to find demand and the US Dollar Index was last seen losing 0.2% on the day below 95.90. Investors eye geopolitical headlines in the absence of data releases.
GBP/USD battles 1.3600 as BOE policymakers testify.GBP/USD is trading near 1.3600 during the European session on Wednesday as investors assess the latest comments from Bank of England officials. BOE Governor Bailey told UK Parliament that higher interest rates would raise unemployment and slow growth.
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