Pound Climbs Ahead Of Central Bank Meetings
03 May 2022 - 4:57PM
RTTF2
The pound advanced against its major counterparts in the
European session on Tuesday, as risk sentiment improved amid strong
earnings reports and ahead of central bank meetings, which are
expected to continue on their rate hike cycles amid inflationary
pressures.
The Federal Reserve begins its two-day meeting later today and
is expected to deliver a 50 basis point interest rate hike on
Wednesday.
The Fed is expected to begin reducing its balance sheet that has
swollen to nearly $9 trillion.
The Bank of England will announce its interest rate decision on
Thursday, with investors expecting an another 25 basis point hike
to combat inflation.
The BoE has raised interest rates at three consecutive meetings
and a fourth increase would take rate to 1 percent, a level not
seen since early 2009.
The pound edged up to 1.2555 against the greenback and 0.8372
against the euro, following its prior lows of 1.2480 and 0.8413,
respectively. The currency may possibly challenge resistance around
1.29 against the greenback and 0.82 against the euro.
Reversing from an early low of 163.42 against the yen, the pound
rose to 163.42. The pound is seen locating resistance near the
165.00 level.
The pound touched an 8-day high of 1.2279 against the franc, up
from a 4-day low of 1.2191 seen at 5:30 pm ET. If the currency
rises further, 1.25 is likely seen as its next resistance
level.
Looking ahead, U.S. factory orders for March will be released in
the New York session.
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