July 18, 2022 14:45:10
The Sterling outperformed the G-10 currencies as the fresh trading week begins. A correction in the U.S dollar and risk-on mood supported the move in the Britain Pound. Investors assessed the impact of the Fed interest rate hike. However, a softer tone from several Fed officials who advocate for less hawkish bets halts the USD rally.
Atlanta Fed President Raphael Bostic and St. Louis’s James Bullard said they backed 75 basis point moves. The aggressive rate hike expectations were further lowered after the release of the U.S consumer long-term inflation expectations that declined in early June by more than forecast to 2.8% as compared to 3.1% a month earlier.
In addition to that, the assurance from the People’s Bank of China’s Governor Yi Gang to support the ailing economy with more stimulus. This, added to the positive sentiment in the market, raising the risk-on sentiment.
Furthermore, investors brace for a radical service bill complied by the former chancellor and Tory leadership contender Rishi Sunak to be released on Wednesday. This will clear the way for ministers to assess regulatory decisions made by the BoE if they do not like them.
Global risk sentiment boosted riskier assets including equities, commodities, and currencies.
As of press time, GBP/USD reads at $1.2010, up 1.33% for the day.
GBP/USD refreshes 1.2000 mark
On the 4-hour chart, after failing to the fresh 2-year lows of $1.17595 on July 14, the GBP/USD pair recovered sharply. The pair refreshes 10-day highs near 1.2010 with strong upside momentum.
However, a support-turned-resistance level near 1.20305 extending from June 14. A daily acceptance above the mentioned level would bring more gains in the spot.
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