- Bank of England raises interest rate by 25 basis points, as expected.
- After a 75 basis point hike by the Fed, the focus returns to the data.
- GBP/USD weakens slightly after decisions but holds above 1.2050.
GBP/USD lost ground after the Bank of England’s decision to raise the benchmark interest rate by 25 basis points. The pound weakened, taking the pair to hit a daily low of 1.2039, but quickly bounced back above 1.2100.
Moderate impact after the BoE
The drop after the BoE meeting of the pound looks moderate at the moment. It seems to reflect a not so strong message from the central bank and some possibility that there was a rise of 50 basis points. Three of the nine members asked for a raise of 50 points, which was not enough. This meeting does not include a press conference which kept expectations of a higher hike low.
The impact on the market at the moment is being moderate. GBP/USD’s initial decline was partially erased. The pair operates in negative territory, largely due to a general rise in the dollar in the market, which is appreciated after the fall on Wednesday, which followed the decision of the Federal Reserve.
While the market continues to analyze what the BoE and the Fed left behind, on Thursday the weekly report on unemployment subsidy requests and the report on housing starts and construction permits will be published in the US.
Should GBP/USD settle below 1.2050, downside pressures could increase exposing the 1.2000 zone. To the upside, the first resistance appears at 1.2140 and then follows the 1.2205/10 zone, where the highs of the last two days are.
Technical levels
Source: Fx Street
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