GBP/USD has been sluggish near 1.20. Economists at ING expect the pair to remain under pressure for now before recovering to 1.23/1.25 by the summer.
BoE tightening could be coming to a close
“Unlike the Federal Reserve (+75 bps) and European Central Bank (+100 bps), we think the Bank of England may only have 25 bps more of tightening left to do – taking Bank Rate to 4.25%. This is partly because more equivocal speeches from BoE officials and key survey data suggest tightness in the UK labour market is abating.”
“Our game plan sees GBP/USD staying soft through March on the strong Dollar (1.1850 the potential and outside risk to 1.1650), before broader Dollar weakness sees cable return to 1.23/1.25 this summer.”“A difficult equity environment could also challenge Sterling.”
EUR/USD drops toward 1.0600 on hawkish Powell remarks
EUR/USD came under renewed bearish pressure and declined sharply toward 1.0600. FOMC Chairman Jerome Powell’s prepared remarks showed that the chairman will tell Congress they are ready to increase the pace of rate hikes, triggering a USD rally.
GBP/USD falls sharply to the 1.1900 area on renewed USD strength
GBP/USD extended its daily slide toward 1.1900 on Tuesday amid renewed US Dollar strength. The hawkish tone seen in FOMC Chairman Jerome Powell’s prepared remarks weighs heavily on market sentiment and forces the pair to stay on the back foot.
Gold extends slide toward $1,820 as US yields rebound
Gold price continues to push lower and trades deep in negative territory near $1,820. The benchmark 10-year US Treasury bond yield climbed above 4% on the back of FOMC Chairman Jerome Powell’s hawkish statement, ramping up the bearish pressure on XAU/USD.
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