GBP/USD to keep trending lower
“Omicron to make BoE more cautious over raising rates in near-term. A decision to leave rates on hold next week is better priced now which should help dampen negative GBP reaction. Dropping guidance for rate hikes in the coming months would be a bigger bearish surprise for GBP.
The timing of lift-off for rate hikes by the BoE and Fed appears to be narrowing considerably if the BoE delays raising rates again while the Fed speeds up tightening plans.
The timing of lift-off for rate hikes by the BoE and Fed appears to be narrowing considerably if the BoE delays raising rates again while the Fed speeds up tightening plans.
Comment:
Brexit, coronavirus fears probe corrective pullback near 1.3250 as Fed, BOE eyed
Comment:
The British pound dipped to 1.3170s, then bounced back near 1.3200
The GBP/USD edged lower during the New York session after the Fed decided to keep interest rates unchanged at the 0-0.25% range. Further, it decided that a faster bond taper is needed, reducing its bond purchases by $30 Billion, in line with the market’s expectations. Also, the dot-plot witnessed that most of the board members feel comfortable hiking at least three times in 2022, followed by three times in 2023 and three times in 2024.
According to the Summary of Economic Projections (SEP), the Federal Reserve Board members, the median view of the Federal Fund Rates in 2022 is at 0.9%, in 2023 at 1.6%, and by 2024 at 2.1%.
The GBP/USD edged lower during the New York session after the Fed decided to keep interest rates unchanged at the 0-0.25% range. Further, it decided that a faster bond taper is needed, reducing its bond purchases by $30 Billion, in line with the market’s expectations. Also, the dot-plot witnessed that most of the board members feel comfortable hiking at least three times in 2022, followed by three times in 2023 and three times in 2024.
According to the Summary of Economic Projections (SEP), the Federal Reserve Board members, the median view of the Federal Fund Rates in 2022 is at 0.9%, in 2023 at 1.6%, and by 2024 at 2.1%.