GBP/USD refreshes daily low, below mid-1.2000s after BoE’s expected 25 bps rate hike.

GBP/USD met with a fresh supply after the BoE hiked interest rates by 25 bps, as expected.Rising US bond yields, the risk-off impulse underpinned the USD and further exerted pressure.

A break below the 1.2000 mark is needed to confirm a fresh breakdown and any further losses.The GBP/USD pair witnessed some selling during the mid-European session and dropped to a fresh daily low, around the mid-1.2000s after the Bank of England announced its policy decision.

As was widely expected, the UK central bank decided to hike interest rates for the fifth consecutive time to curb soaring inflation. The nine-member Monetary Policy Committee (MPC) voted 6-3 for the 25 bps hike in the bank rate from 1.0% to 1.25%, with the minority voting for a 50 bps increase.

In the accompanying policy statement, the BoE noted that it was ready to act “forcefully” to stamp out dangers posed by the persistent rise in inflationary pressures. This suggested that the central bank would opt for a more gradual approach amid recession fears and weighed on the British pound.

On the other hand, a combination of factors assisted the US dollar to regain positive traction and reversed the post-FOMC losses. A fresh leg up in the US Treasury bond yields, along with the risk-off impulse, underpinned the safe-haven buck. This exerted additional pressure on the GBP/USD pair.

With the latest leg down, spot prices have eroded a part of the overnight goodish recovery gains. That said, the lack of a significant selling warrants caution for bearish traders. Hence, it will be prudent to wait for a sustained break below the 1.2000 psychological mark before positioning for further losses.

GBP/USD retreats below 1.2100 after 25 bps BOE hike

GBP/USD has lost its traction and declined below 1.2100 with the initial reaction to the Bank of England’s decision to hike its policy rate by 25 basis points. Three BOE policymakers, Haskel, Mann and Saunders, voted for a 50 bps rate hike at the meeting.


EUR/USD trades in negative territory near 1.0400

EUR/USD continues to trade in negative territory near 1.0400 on Thursday. The sharp upsurge witnessed in EUR/GBP cross following the BOE’s rate decision seems to be helping the pair limit its losses despite the broad-based doıllar strength.


Gold slumps to $1,820 area amid surging US bond yields

Gold has erased a large portion of Wednesday’s gains and retreated to the $1,820 area on Thursday. Following the Fed-inspired drop, the benchmark 10-year US T-bond yield is up more than 4% on the day, weighing heavily on XAU/USD.

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