GBP / USD falls from 1.3760 to 1.3710 despite growing bets of a rate hike from the BoE

• The British pound falls despite aggressive comments from Bank of England Governor Bailey.
• Market sentiment is pessimistic as European stocks are losing, as are US stocks, with the exception of the Nasdaq.
• Bank of England’s Andrew Bailey said central banks must prevent higher inflation expectations from becoming permanent.

The GBP it falls during the American session, down 0.23%, trading at 1.3712 at the time of writing. The rise in energy prices, the increase in inflationary pressures observed in the latest CPI readings in the economies of developed countries, and the tightening of monetary policy by central banks affected market confidence.
Significant European equity indices post losses between 0.45% and 0.85%, while in the US, most indices, except the high-tech Nasdaq, have a 0.02% -0.85% lead. 0.22%.

Meanwhile, the US dollar index, a basket that measures the performance of the US dollar against six pairs, is up 0.04%, at 93.99, supported by rising US Treasury yields. , with the 10-year yield rising 1bps, to 1,586%.

The Governor of the Bank of England, Andrew Bailey, reinforces that the central bank will take measures to tackle inflation

Over the weekend at a panel organized by the Group of 30, Bank of England (BoE) Governor Andrew Bailey said that while central banks do not have the tools to counter supply disruptions, officials must prevent higher inflation expectations from becoming permanent.

Additionally, Bailey added that rising energy prices mean inflation will last longer than expected. He also said that “we at the Bank of England have signaled, and this is another sign, that we will have to act. But of course that action occurs in our monetary policy meetings. “

That said, since October 9, when Bank of England members Michael Saunders and Andrew Bailey raised concerns about inflation and the central bank’s reaction, the British pound rallied from 1.3567 to 1.3772, based on expectations from the UK. investors, that there is a rise in interest rates.

Putting this aside for a moment, in the UK, the economic agenda featured the Rightmove House Price Index for October, which expanded 1.8% and 6.5% on a monthly and yearly basis, respectively, higher than the reading. previous. On the US front, Industrial Production (IP) contracted 1.3%, worse than the 0.2% expansion estimated by economists. Additionally, capacity utilization followed in the footsteps of intellectual property, falling from 76.2% in August to 75.2% in September.

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