GBP/USD hits fresh six-month low below 1.2250 on BoE’s surprise hold


  • GBP/USD extends sell-off to hit a fresh six-month low, nearing the 1.2200 mark.
  • Bank of England surprises by holding interest rate at 5.25% in the September meeting.
  • Focus shifts to the US economic data for further trading impetus on GBP/USD.

GBP/USD sees a fresh bout of selling pressure, hitting the lowest level since March this year, as the Pound Sterling feels the heat of the dovish Bank of England (BoE) interest rate decision.

BoE pauses, hits Pound Sterling

Following the September meeting, the BoE decided to keep the benchmark interest rate steady at 5.25%, as against market expectations of a 25 basis points (bps) hike to 5.50%. However, industry experts and analysts had begun pricing chances of a status quo after the unexpected fall in the UK inflation data for August.

The Office for National Statistics (ONS) said on Wednesday that the UK annual Consumer Price Index (CPI) edged 6.7% higher in August, cooling off from a 6.8% rise in July. The market consensus was for a 7.1% increase. The Services CPI rose 6.8% YoY vs. July’s 7.4% surge. The ONS said, “the largest downward contributions to CPI rates came from food and accommodation services.”

According to the Overnight Index  Swaps (OIS) curve, the odds of a 25 bps November BoE rate hike have dropped to 64% from 81% before the interest rate decision.

In the last minutes, GBP/USD is reversing the dip to multi-month lows, recovering above the 1.2250 barrier, still down 0.60% on the day.

Attention now turns toward the US economic data releases, including the weekly Jobless Claims and the Existing Home Sales for fresh US Dollar valuations, especially after the US Federal Reserve (Fed) held rates steady on Wednesday but projected one more 25 bps rate hike this year and 50 bps of rate cuts in 2024, versus 100 bps of 2024 cuts in June projections.

GBP/USD: Technical levels to watch

GBP/USD

Overview
Today last price 1.2278
Today Daily Change -0.0064
Today Daily Change % -0.52
Today daily open 1.2344
 
Trends
Daily SMA20 1.2523
Daily SMA50 1.27
Daily SMA100 1.2649
Daily SMA200 1.2433
 
Levels
Previous Daily High 1.2421
Previous Daily Low 1.2332
Previous Weekly High 1.2548
Previous Weekly Low 1.2379
Previous Monthly High 1.2841
Previous Monthly Low 1.2548
Daily Fibonacci 38.2% 1.2366
Daily Fibonacci 61.8% 1.2387
Daily Pivot Point S1 1.231
Daily Pivot Point S2 1.2277
Daily Pivot Point S3 1.2221
Daily Pivot Point R1 1.24
Daily Pivot Point R2 1.2455
Daily Pivot Point R3 1.2489

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD struggles near multi-month low; remains below 0.6500 after Aussie jobs report

AUD/USD struggles near multi-month low; remains below 0.6500 after Aussie jobs report

AUD/USD hangs near its lowest level since August 6 and remains below the 0.6500 psychological mark following the release of rather unimpressive Australian employment details. RBA Governor Michele Bullock said this Thursday that interest rates were restrictive enough and will not rise any further. 

AUD/USD News
USD/JPY stands firm near multi-month top, above mid-155.00s

USD/JPY stands firm near multi-month top, above mid-155.00s

USD/JPY holds steady near its highest level since July 24, above mid-155.00s during the Asian session on Thursday and seems poised to prolong its appreciating move. The continuation of the Trump trade lifts the USD to a fresh YTD high. 

USD/JPY News
Gold price remains vulnerable near its lowest level since September 19

Gold price remains vulnerable near its lowest level since September 19

Gold price enters a bearish consolidation following a four-day decline to a nearly two-month low amid oversold conditions on hourly charts. Any meaningful recovery, however, seems elusive amid the recent USD bullish run to a fresh YTD low, bolstered by expectations for US President-elect Donald Trump's expansionary policies and elevated US bond yields. 

Gold News
Dogecoin Price Forecast: Miners offload $240M as DOGE approaches risk zone

Dogecoin Price Forecast: Miners offload $240M as DOGE approaches risk zone

Since Donald Trump’s victory on November 5, Dogecoin has emerged as the best performing asset among the top 10 ranked cryptocurrencies. On November 12, DOGE reached a new milestone price propelled by Trump’s statement confirming Elon Musk’s involvement in the incoming administration. 

Read more
Trump vs CPI

Trump vs CPI

US CPI for October was exactly in line with expectations. The headline rate of CPI rose to 2.6% YoY from 2.4% YoY in September. The core rate remained steady at 3.3%. The detail of the report shows that the shelter index rose by 0.4% on the month, which accounted for 50% of the increase in all items on a monthly basis. 

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures