- The Bank of England will raise rates 50 basis points, new forecasts could be announced.
- Worries about a slowdown in the global economy weighed on US indices.
- GBP/USD is trading near its recent multi-month high of 1.2343.
The GBP/USD pair reached a high of 1.2321 after the Wall Street open, but pared intraday gains and stands around 1.2280. The pair ends the week flat as demand for US dollars remained subdued.
For now, US indices are trading mixed, with the Dow Jones and S&P 500 in the red, while the Nasdaq is up just 12 points. Generally better-than-expected US macroeconomic data has raised fears that the US Federal Reserve will go for an aggressive 75 basis point hike, which will ultimately increase the risk of a further recession. long and pronounced in 2023.
The next week will see the monetary policy decisions of the US Federal Reserve, the European Central Bank and, most importantly for sterling, the Bank of England. Market participants have fully priced in a 50 basis point rise, and expect few surprises on this. However, investors are unaware of what English policymakers have on the agenda for 2023.
The Bank of England has acknowledged that the country is in recession and expects the decline to continue well into 2023. New growth and inflation forecasts will be key to the direction of the pound.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
