Forex News

GBP/USD Slumps 1% as Traders Unwind BoE Rate Hike Bets

2022.04.26 23:49

GBP/USD Slumps 1% as Traders Unwind BoE Rate Hike Bets

By Yasin Ebrahim

Investing.com – The pound slumped on Tuesday, adding to losses from a day earlier, as traders continue to unwind their bets for aggressive Bank of England rate hikes amid growing concerns about the UK economic outlook as inflation rages on.   

GBP/USD fell 1.3% to $1.2580.

“[W]eak retail sales and consumer confidence numbers highlighted that elevated inflation is biting for the consumer,” NAB Markets Research said in a note.

The negative data has forced market participants to reassess expectations that the Bank of England, or BoE, will follow an aggressive path of rate hikes.

“Tightening expectations for the 5 May BoE meeting have dropped backed to 29bp from 38bp early last week,” ING said Tuesday.

The central bank is caught between a rock and hard place that grows increasingly uncomfortable by the day as moves to aggressively rein in inflation risk tipping the economy into recession.

“We are now walking a very tight line between tackling inflation and the output effects of the real income shock, and the risk that that could create a recession and pushes too far down in terms of inflation,” Bank of England Governor Andrew Bailey said last week. 

The need to get inflation back to the 2% target, however, is expected to continue to drive the central bank’s monetary policy approach as bets on the Bank of England raising rates to around 2.25% by year-end remains intact.

Still, the path forward for the pound, particularly against the dollar, appears to lower rather higher.

“Sterling continues to trade on a fragile footing … [m]ost now feel that GBP/USD has to test 1.2500, and 1.2850 will now act as strong resistance – should it get that high,” ING added,

Source

Related Articles

Leave a Reply

Back to top button
bitcoin
Bitcoin (BTC) $ 82,869.20 0.46%
ethereum
Ethereum (ETH) $ 1,893.81 0.38%
tether
Tether (USDT) $ 1.00 0.00%
xrp
XRP (XRP) $ 2.32 2.51%
bnb
BNB (BNB) $ 579.94 0.01%
solana
Solana (SOL) $ 125.65 1.03%
usd-coin
USDC (USDC) $ 1.00 0.00%
cardano
Cardano (ADA) $ 0.718558 1.00%
dogecoin
Dogecoin (DOGE) $ 0.168774 1.48%
tron
TRON (TRX) $ 0.221261 1.58%
staked-ether
Lido Staked Ether (STETH) $ 1,891.35 0.62%
pi-network
Pi Network (PI) $ 1.58 8.11%
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 82,607.13 0.67%
leo-token
LEO Token (LEO) $ 9.76 0.30%
chainlink
Chainlink (LINK) $ 13.94 4.53%
stellar
Stellar (XLM) $ 0.278922 1.28%
usds
USDS (USDS) $ 1.00 0.01%
wrapped-steth
Wrapped stETH (WSTETH) $ 2,264.86 0.40%
hedera-hashgraph
Hedera (HBAR) $ 0.191698 2.87%
avalanche-2
Avalanche (AVAX) $ 18.64 2.46%
shiba-inu
Shiba Inu (SHIB) $ 0.000013 2.62%
sui
Sui (SUI) $ 2.21 3.84%
the-open-network
Toncoin (TON) $ 2.82 2.22%
litecoin
Litecoin (LTC) $ 90.15 0.18%
bitcoin-cash
Bitcoin Cash (BCH) $ 331.38 0.85%
polkadot
Polkadot (DOT) $ 4.13 2.50%
mantra-dao
MANTRA (OM) $ 6.25 3.15%
ethena-usde
Ethena USDe (USDE) $ 0.999945 0.04%
weth
WETH (WETH) $ 1,894.37 0.51%
binance-bridged-usdt-bnb-smart-chain
Binance Bridged USDT (BNB Smart Chain) (BSC-USD) $ 0.999333 0.14%
bitget-token
Bitget Token (BGB) $ 4.27 1.71%
hyperliquid
Hyperliquid (HYPE) $ 13.66 8.41%
whitebit
WhiteBIT Coin (WBT) $ 28.26 0.77%
wrapped-eeth
Wrapped eETH (WEETH) $ 2,012.32 0.51%
monero
Monero (XMR) $ 208.68 0.44%
uniswap
Uniswap (UNI) $ 5.85 1.44%
susds
sUSDS (SUSDS) $ 1.04 0.01%
dai
Dai (DAI) $ 0.999748 0.04%
near
NEAR Protocol (NEAR) $ 2.65 1.43%
aptos
Aptos (APT) $ 5.19 0.64%
pepe
Pepe (PEPE) $ 0.000007 4.29%
ethereum-classic
Ethereum Classic (ETC) $ 18.16 2.22%
ondo-finance
Ondo (ONDO) $ 0.852241 1.07%
internet-computer
Internet Computer (ICP) $ 5.57 0.64%
okb
OKB (OKB) $ 44.55 6.13%
coinbase-wrapped-btc
Coinbase Wrapped BTC (CBBTC) $ 82,811.19 0.55%
gatechain-token
Gate (GT) $ 20.44 0.37%
aave
Aave (AAVE) $ 166.22 3.68%
mantle
Mantle (MNT) $ 0.723541 3.67%
official-trump
Official Trump (TRUMP) $ 11.58 7.39%