- The pound gains momentum against the dollar and also rises against the euro.
- GBP/USD rises to five-day highs after managing to hold above 1.3500.
The GBP/USD is rising on Wednesday and climbed as high as 1.3589, reaching the highest level since last Thursday. The pair then had a correction finding support above 1.3465 and is approaching daily highs again.
The advance of the pair has as a factor behind the weakness of the dollar, to which can be added a rise in the equity markets. For its part, the pound, in addition to climbing against the dollar, also does so against the euro. EUR/GBP is trading negative at 0.8415.
BoE and Fed expectations
ING analysts explain that the pound continues to be well supported by the “hawkish” sentimentBank of England. “The market has fully priced in a 25 basis point hike for March 17 and four more hikes later. That pricing may look very aggressive, but it won’t be undone until we see a turnaround in UK retail inflation.” They expect the pound to maintain its gains during the first half of the year.
Regarding the US, on Wednesday there will be no impact data and the focus this week is on the data for thursday inflation. The Consumer Price Index is expected to reach 7.3% (yearly). The data will serve as input for the Fed’s expectations.
The governor of the fedMichelle Bowman and Cleveland Fed President Loretta Mester will speak publicly on Wednesday.
Technical levels
Source: Fx Street
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