GBPUSD: Dovish BOE Comments Cap GDP Rally
GBP Softens Despite GDP Beat
GBPUSD is softening from initial highs printed earlier today in response to better-than-forecast UK data. The upside move has been tempered by some dovish BOE commentary and a stronger US Dollar through the European morning. On the data front, UK GDP was seen rising to 0.5% from 0.1% prior (and expected). The data saw traders lifting their hawkish BOE expectations in line with inflationary risks from the Iran war and the hawkish signals we’ve seen from other central banks. However, this rally was quickly turned lower again on comments from BOE governor Bailey who spoke this morning during an interview on the sidelines of the IMF spring meetings in Washington. .
BOE’s Bailey Pushes Back on Hike Calls
Bailey warned that the bank was in no rush to tighten monetary policy and would not rush judgements on interested rates. The BOE head was keen to point out the heavy uncertainties within the outlook both domestically and globally as a result of the war. This comes on the back of the OMF slashing its global growth outlook for the year as a result of the energy price spikes created by the war. The group even warned that the global economy could face recession is oil prices stayed above $100 a barrel into next year. For now, GBP will likely stay weak today while USD trades in the green though stands to rally next week if we have any positive breakthrough on the US/Iran peace front, leading USD lower.
Technical Views
GBPUSD
The rally in GBPUSD has seen price break back above the 1.3446 level though the move has stalled for now. While price holds above 1.3446, focus is on a continuation higher in line with bullish momentum studies readings, with 1.3774 the next bull target to note.
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