Sterling Pound Spikes to 3-Day Highs on Hawkish BoE Rate Decision

The sterling pound today spiked to its daily highs following the announcement of the Bank of England‘s interest rate decision, which was as expected. The GBP/USD currency pair rallied from its daily lows as investors interpreted the BoE’s decision as being hawkish.
The GBP/USD currency pair today rallied from a daily low of 1.2978 in the early London session to a high of 1.3095 shortly after the BoE news and was headed higher at the time of writing.
The currency pair traded with a bearish bias during the Asian session but turned higher as the London session kicked off. The pair spiked to its daily highs after the BoE released a summary of its monetary policy decisions. The bank left interest rates at 0.75% and the asset purchase program at Â£435 billion as expected. However, the bank’s Monetary Policy Committee voted 7–2 in favour of maintaining current rates instead of 6–3 as expected. Investors interpreted the monetary policy report as being quite hawkish and markets are now pricing in a rate cut at the committee’s August meeting. The BoE Governor Mark Carney was speaking as I was wiring this piece and the pair was still holding on to its gains.
The currency pair’s performance was initially driven by the risk-off market sentiment as the death toll from the Wuhan coronavirus hit 170 earlier today. The stable greenback as tracked by the US Dollar Index, also contributed to the cable’s initial decline.
The currency pair’s short-term performance is likely to be affected by the release of the US GDP report at 13:30 GMT.
The GBP/USD currency pair was trading at 1.3094 as at 12:51 GMT having rallied from a low of 1.2978. The GBP/JPY currency pair was trading at 142.47 having risen from a low of 141.26.

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