Pound Sterling looks offered prior to BoE

Pound Sterling recovers BoE-induced losses as US Dollar retreats

The Pound Sterling (GBP) recovers losses from an intraday low of 1.2450 inspired by the less-hawkish Bank of England’s (BoE) interest rate policy. The GBP/USD pair rebounds strongly as the US Dollar weakens after the higher-than-expected Initial Jobless Claims (IJC) data. For the week ending May 3, individuals claiming jobless benefits were 231K, significantly higher than the consensus of 210K and the prior reading of 209K, upwardly revised from 208K. Weak jobless claims data has boosted concerns over easing labor market conditions due to higher interest rates by the Federal Reserve (Fed).

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, falls sharply to 105.50 from the intraday high of 105.70. Earlier, the US Dollar was firm due to hawkish interest rate guidance from Federal Reserve (Fed) policymakers. S&P 500 futures have posted some losses in the Asian session, exhibiting a decline in investors’ risk appetite. The overall scenario has improved the US Dollar’s appeal. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, holds gains near 105.60. Read more…

GBP/USD Forecast: Pound Sterling looks offered prior to BoE

So far on Wednesday, GBP/USD trades slightly on the defensive around the 1.2500 neighbourhood amidst rising investors’ prudence prior to the BoE’s Super Thursday.

Also adding to Cable’s downward bias is the continuation of the constructive trend in the Greenback, which remains propped up by further selling in the US bond market, which in turn morphs into an extra upside in US yields across the curve. Read more…