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GBP/USD Plummets as BoE Rate Hike Now in Doubt

Last week’s high: $1.4291

Last week’s low: $1.4085

Pound Nosedives as May Rate Hike Expectations Dampened

After briefly striking a new post-Brexit high at the start of the session, the Pound US Dollar exchange rate suffered a sharp sell-off last week on fears the Bank of England (BoE) may no longer be targeting a rate hike next month.

These doubts were mainly driven by some dovish comments from BoE Governor, Mark Carney, on Thursday as well as some weaker-than-expected inflation figures earlier in the week.

Meanwhile after some initial weakness the US Dollar was able to make gains last week as rising US treasury yields and hawkish remarks from Federal Reserve policymakers helped to make USD more attractive to investors.

USD Outlook: GDP figures in Focus

Looking ahead the Pound may be met by further losses this week with the publication of the UK’s latest GDP figures.

The preliminary reading is expected to reveal the UK got off to a slow start this year, with domestic growth forecast to have slowed from 0.4% to 0.3% in the first quarter.

The UK won’t be the only country releasing its latest growth figures this week however, with the US Dollar also likely to face some pressure if US GDP slows at the start of the year, as expected.

 

Key Events

23rd April

11:00 UK CBI Industrial Orders (Mar)

15:00 US Existing Home Sales (Mar)

24th April

15:00 US New Home Sales (Mar)

26th April

11:00 UK CBI Distribute Trades (Mar)

13:30 US Durable Goods Orders (Mar)

27th April

00:00 UK Consumer Confidence (Apr)

09:30 UK GDP (Q1)

13:30 US GDP (Q1)

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To keep up to date with the US Dollar, visit the USD blog in our Currency News section.

 

Arron Morris

Currency Trader
T: 01442 892 065

 

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