British Pound loses grip on 1.34 as Fed hawks stay in charge
The Pound Sterling retreats by some 0.17% on Monday as the Greenback trades in the green following last week’s Fed rate hike, which widened the interest rate differential between the US and the UK, while still-high energy prices put pressure on major central banks to raise rates.
The British Pound (GBP) continues to struggle against a stronger US Dollar (USD) as the Federal Reserve's (Fed) hawkish stance diverges from the Bank of England's (BoE) cautious approach, benefiting the USD. The GBP/USD pair trades around the 1.3375 region, down nearly 0.15% for the day, and is expected to decline further. The Fed raised interest rates for the first time in three years, with officials anticipating at least one more hike this year, while the BoE maintained steady rates.
Geopolitical tensions, such as Houthi attacks on Saudi sites and Iran's stance on the Strait of Hormuz, also favor the USD. Analysts at Danske Bank note that the BoE's decision to hold rates steady triggered some GBP weakness. Technical analysis shows the pair under pressure below the 100-day Simple Moving Average and the 50.0% Fibonacci retracement, suggesting rallies may be capped by these overhead levels.
Immediate support is at the 61.8% Fibo. retracement at 1.3344, with further support at the 78.6% level at 1.3254. Traders will await speeches from FOMC members and developments from the Middle East crisis, as well as a meeting between US President Trump and Chinese President Xi Jinping.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
This story
This is one outlet's version. Read the fullest account.
