The EUR made a significant rise on the news of the stimulus expansion. Will it last long?
BOE rate cut: what's next for the GBP?
Today, the Bank of England made an emergency cut of its interest rate. The regulator shifted the interest rate by 50 basis points to 0.25%. The action was driven by a slowdown of the British GDP growth for January (0% vs. 0.2% expected) and the global uncertainties amid the coronavirus outbreak.
UK GDP growth rate
Source: Trading economics
But there is some optimistic news as well. During the press conference, the BOE governor acknowledged the economic shock caused by the virus, but, at the same time, expressed confidence about its temporary effect. Thus, the weakness of the GBP was short-lived, as bulls took over the market on the Mr. Carney’s beliefs.
Even though GBP/USD plunged below the 1.2864 level, buyers managed to push it higher and help it to retest the 1.2977 level.
If you’re the GBP trader there is no time to relax today. The upcoming UK budget update at 14:30 MT time will contain stimulus measures, which are expected to support the economy and businesses. Follow the updates, as they may have an impact on the GBP.
Time to trade on the GBP?
The market presents a wide range of opportunities today. Besides GBP/USD, take a look at the EUR/GBP. This pair may be a good choice for those who don’t want to deal with the USD volatility expected on the US inflation release at 14:30 MT time.
The Reserve Bank of New Zealand made announcements regarding its monetary policy. The NZD/USD dropped.
April seasonal patterns weren’t supposed to work, but somehow they did. Even a strong fundamental issue such as the global recession amid the coronavirus couldn’t overwhelm it. That’s why May seasonal patterns may work as well.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.