GBPUSD stopped falling; the pair is recovering.
The Pound sterling stopped falling against the USD. The current quote for the instrument is 1.3137.
The USD is weak today – it’s a great chance for other traded currencies to recover and the Pound is taking advantage of it. Market players are switching to risks but it’s not clear right now for how long.
When there are no important statistics, market players are discussing how the Bank of England might behave and what influence its monetary policy might have on the country’s economy. The 25-point rate hike in March may put bearish pressure on the national currency for a significant period of time, especially as the regulator is planning three more rate hikes this year, 25 basis points each.
It appears that the Pound may remain under bearish pressure when the BoE and its policymakers give “soft” comments. But when investors are “risk-friendly” and the USD falls, the Pound may recover. Still, the current trend in the GBP is mostly negative.
Inflation will be the BoE’s leverage. Energy commodities are getting more expensive, the same as food products. This year, the CPI might add up to 7-8%, which is an extraordinary reading for the United Kingdom. As a rule, the regulator prefers to keep an eye on the situation without interfering, but this time it’s definitely not the case.
