News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • Now that the Bitcoin ATH is out of the way - BTC +2.1% @ $65,540 - can we concentrate on Ethereum #btc #bitcoin #eth #ethereum https://t.co/jka7AcE27J
  • Hit series ‘Squid Game’ expected to drive subscriber growth into year end. Get your market update from @RichardSnowFX here:https://t.co/fQBG9dlLfG https://t.co/4KjKPA6u8d
  • $EURUSD res has held at that 1664 spot but buyers stepped-in for some higher-low support, right around prior resistance. could have some continuation left here, next res zone 1700-1736 $EURUSD move will be key to #DXY dynamics https://t.co/oSPWzxUtCg https://t.co/0jBF75ztJe
  • Mid-Week Market Update session with special guest @tastytrade's @tastytradeRyan starting now -- join here: https://t.co/2VlNFcWn8R
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: France 40: 0.12% US 500: 0.09% Wall Street: 0.02% Germany 30: -0.17% FTSE 100: -0.22% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/JOBV3OpuX9
  • RT @carlquintanilla: B of A: “The virus situation is improving rapidly and this has helped spur a pick-up in activity. .. Air travel contin…
  • $USD still holding support in the 93.43-93.73 zone shorter-term, not yet able to pose any meaningful continuation moves, still lower-lows, highs next r level, 94.17 next s level, 93.52 #DXY https://t.co/d5DtqK4xUc https://t.co/ZRCho2lSOi
  • 🇨🇦 Core Inflation Rate YoY (SEP) Actual: 3.7% Previous: 3.5% https://www.dailyfx.com/economic-calendar#2021-10-20
  • 🇨🇦 Inflation Rate MoM (SEP) Actual: 0.2% Expected: 0.1% Previous: 0.2% https://www.dailyfx.com/economic-calendar#2021-10-20
  • 🇨🇦 Inflation Rate YoY (SEP) Actual: 4.4% Expected: 4.3% Previous: 4.1% https://www.dailyfx.com/economic-calendar#2021-10-20
GBPUSD Surges on Hawkish Bank of England

GBPUSD Surges on Hawkish Bank of England

Martin Essex, MSTA, Analyst

GBPUSD talking points:

- As forecast, the Bank of England has left the UK bank rate at 0.5%, its asset purchase target at £435 billion and its corporate bond target at £10 billion.

- However, a hawkish stance has strengthened the British Pound sharply.

- At his post-meeting press conference, Governor Mark Carney said it is likely to be necessary to raise interest rates somewhat earlier and to a somewhat greater extent than thought previously.

Learn how to trade like an expert by reading our guide to the Traits of Successful Traders

New to forex and want to find out more about trading GBPUSD? Take a look at our Forex Trading Guides

Pound jumps as BoE takes hawkish stance

GBPUSD rose strongly Thursday after the Bank of England left all its key monetary policy settings unchanged but shifted expectations towards two or even three quarter-point UK interest rate increases this year rather than just one. Following the publication of the bank’s quarterly Inflation Report alongside its rate decision, Governor Mark Carney hinted that a quarter-point hike in UK interest rates is now possible as soon as May.

The bank commented that if the UK economy grows as expected, monetary policy will have to be tightened somewhat earlier and by somewhat more than it was expecting last November. Following his comments, the chances of a May rate increase climbed to 67% judging by market prices.

Meanwhile, the bank nudged up its inflation expectations, based on market interest rates, in one year, two years’ and three years’ time. Inflation could rise back above 3% in the short term, Carney said.

The BoE also lifted its forecasts for UK economic growth – boosted by global growth – despite arguing that Brexit uncertainty is weighing on UK business investment.

In response, GBPUSD rose sharply despite a comment by Carney that any rate increases will be gradual and limited.

GBPUSD Price Chart, Five-Minute Timeframe (February 8, 2018)

GBPUSD price chart

Chart by IG

UK government bond prices fell back, with the yield on the benchmark 10-year gilt rising four basis points to 1.592%. EURGBP fell as the Pound strengthened.

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

For help to trade profitably, check out the IG Client Sentiment data

And you can learn more by listening to our regular Trading Webinars

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES