BoE: Bank rate could rise as high as 4.75% if global financial stability risks remain contained – Rabobank

FXStreet Insights Team FXStreet

The Bank of England raised its policy rate by 25 basis points to 4.25%. Economists at Rabobank belive that Bank rate could rise as high as 4.75% and forecast the next 25 bps hike in May.

Another 25 bps hike for the May meeting

“The BoE raised its policy rate by 25 bps to 4.25%. The vote was split 7-2-0, with external members Tenreyro and Dhingra voting for a hold.”

“It will tighten policy further in May if price pressures persist and credit conditions permit. The shift to a meeting-by-meeting approach is not as dovish as some expected.”

“The Financial Policy Committee has judged that the UK banking system remains resilient, effectively giving the green light to this rate increase.”

“For now, we hold on to our long-held view that Bank rate could rise as high as 4.75% with the next 25 bps hike in May. This requires that global financial stability risks remain contained.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD keeps the offered stance just above 1.1700

EUR/USD is coming under heavy selling pressure in what has been a rather grim start to the new trading week, with the pair now trading close to the 1.1700 support area as the US Dollar stages a solid rebound. The prevailing flight to safety mood continues to favour the Greenback, as investors react to the escalating conflict in the Middle East and trim risk exposure across the board.

GBP/USD hits new yearly lows near 1.3300

GBP/USD adds to the recent bearish tone, approaching to the key 1.3300 support to reach fresh YTD troughs against the backdrop of the robust performance of the US Dollar. Indeed, Cable’s decline comes amid the firm demand for the safe-haven space in the wake of the US and Israel attacks to Iran.

Gold trims losses, back below $5,400

Gold now surrenders part of the earlier advance past the $5,400 mark per troy ounce at the beginning of the week. Indeed, the precious metal’s strong uptick remains fuelled by increasing geopolitical tensions in the Middle East amid the intense demand for safer assets.

Bitcoin on brink of breakdown amid US-Iran war

Bitcoin (BTC) remains under pressure near the key support level of $65,700. Trading at $66,400 at the time of writing on Monday, a breakdown below this critical level would suggest a deeper correction ahead.

The Fed is finally talking about AI – Here's why it matters for the US Dollar

AI is moving from earnings calls into the heart of monetary policy discussions, forcing Federal Reserve officials to confront a new question: How to act if AI reshapes inflation, employment and interest rates at the same time?

Pi Network Price Forecast: Core team offloads supply, weighing on PI recovery

Pi Network hovers below $0.1700, broadly steady at press time on Monday, attempting a recovery after a 2% loss the previous day. Sunday’s decline aligned with nearly 49 million PI tokens offloaded by the Pi Foundation, implying a spike in supply pressure that capped the prevailing four-day recovery.