GBP/USD: Bulls look to recapture 1.3200 as BOE raises the interest rate to 0.75%
- GBP/USD is looking to reclaim 1.3200 on subdued performance from the DXY.
- BOE raised the interest rates by 0.25% for the third time in a row.
- Fed’s gradual approach of raising interest rates has downgraded the greenback.
The GBP/USD pair has been offered around 1.3200 after the Bank of England (BOE) raised the interest rates by 25 basis points on Thursday. The interest rate in Britain has reached 0.75%.
It is worth noting that the BOE has increased their interest rates consecutively for the 3rd time on Thursday. Also, the BOE was the first central bank, which raised the interest rates first since the pandemic of Covid-19 when all central banks were operating on the lowest interest rates. The BOE has preferred not to take the bullet and stick to interest rate expansion amid January’s inflation print at 5.5%, which is near a 30-year high. Moreover, the interest rate is likely to rise further in wake of the war between Russia and Ukraine.
The cable has witnessed a decent upside move in the last three trading sessions after remaining vulnerable on negative impulse in the market amid Russian military activity in Ukraine.
Meanwhile, the US dollar index (DXY) has sensed some buying interest near 97.70 and is oscillating around 98.00 after the carnage. Interest rate expansion from the Federal Reserve (Fed) brought a selling pressure on the greenback as Fed Open Market Committee (FOMC) preferred a gradual rate expansion rather than going aggressive.
Going forward, the headlines from the Russia-Ukraine war will remain a major trigger for the market. While, investors will also focus on Federal Reserve Bank Gov. Michelle Bowman’s speech, which is due on Friday.