Sterling Climbs as Markets Dial Back BoE Rate Cut Expectations
Action Insight Weekly Report 5-25-24 |
Sterling Climbs as Markets Dial Back BoE Rate Cut Expectations |
Last week, global financial markets were heavily influenced by evolving expectations surrounding central bank monetary easing paths and unexpected political developments. British Pound emerged as the most significant gainer, buoyed by fading expectations of an immediate BoE rate cut in June. This shift was precipitated by latest inflation data and compounded by the UK government's unexpected decision to hold an election in July. This combination of factors not only boosted the Pound but also contributed to a downturn in FTSE. Dollar secured the position as the second strongest currency even though its momentum was relatively weak. Markets adjusted their expectations on Fed, moving away from anticipating a rate cut in September. This reassessment followed revelations from the hawkish tones in FOMC minutes and was supported by robust economic data. In the equity markets, results were mixed; DOW underperformed relative to S&P 500 and, notably, NASDAQ, which benefited from sector-specific dynamics... |
GBP/JPY Weekly Outlook GBP/JPY's rally from 191.34 continued last week and outlook is unchanged. This rise is still seen as the second leg of the corrective pattern from 200.53. Initial bias stays on the upside for 100% projection of 191.34 to 180.07 from 195.02 at 200.75. But upside should be limited there. On the downside, below 198.25 minor support will turn intraday bias neutral first. Further break of 197.07 will argue that the third leg has started, and target 191.34 support and possibly below. | |
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