GBPUSD had an effective correction after plummeting. The British Pound was growing against the USD early in the week but slowed down on Tuesday. The current quote for the instrument is 1.3905. The Pound was weak since the moment the US Federal Reserve announced its intentions to raise the benchmark interest rate twice before the end of 2023. It’s earlier than expected, that’s why the USD skyrocketed and madу other traded currencies plummet.
However, the Pound had an effective correction, which shouldn’t be considered as a short-term trend reversal though. Emotions after the Fed meeting are still a factor, so GBP will remain under pressure, although not as strong as before.
This week, the Bank of England will have a scheduled meeting. Inflation in the country has reached its local peak but remembering the British regulator’s conservative approach, one shouldn’t expect any decisive measures. Monetary policymakers will likely continue having their controversy about the bond-buying program but investors are pretty sure that the BoE will announce a rate hike ahead of the planned schedule. The hike is expected to be 25 basis points by December 2022.
At the same time, the fundamental story of the UK-EU negotiations on the trade agreement continues. The parties still haven’t come to a consensus because the Brits remain aggressive and don’t want to agree to a compromise. This might be another thing that pressures the Pound.
