Sterling trades above 1.3400 ahead of a widely expected 25-basis-point BoE rate hike, with traders already pricing in further tightening cycles.
The BoE is expected to raise Bank Rate to 4.00% from 3.75% on Thursday, and money markets have three more hikes priced after that. Higher UK rates make sterling more attractive, supporting GBP. The risk is that much of this is already priced, so a less hawkish signal could reverse some gains.
A rise in Bank Rate to 4.00% from 3.75% on Thursday.
Money markets have three more hikes priced after Thursday's expected move.
GBP/USD holds just above 1.3400 and its 200-day Exponential Moving Average and is on track for a fifth straight gain as markets anticipate a Thursday BoE hike to 4.00% and three more thereafter. A hawkish BoE supports the pair. Because those hikes are already priced, upside may be limited if the BoE tempers expectations.
Just above 1.3400 and its 200-day Exponential Moving Average.
A fifth straight gain.
The British Pound is poised for a fifth consecutive gain as investors anticipate the Bank of England will lift the Bank Rate to 4.00% on Thursday. Money markets have already priced in three additional hikes beyond this week's move, keeping the currency pair supported above its 200-day EMA.
The market expects the Bank of England to raise the Bank Rate to 4.00% from the current 3.75%.
GBP/USD is holding just above 1.3400 and its 200-day Exponential Moving Average.