All Eyes on the Pound’s Movement Following the Rate Hike to 0.5%
04.02.2022
- Remarks by Bank of England Governor Bailey
- U.S. Employment Report
On the previous day, U.S. currencies moved in tandem with falling stock prices following earnings reports from tech companies, causing the Dollar Index to drop to 95.19. As the U.S. dollar weakened, the EUR/USD pair rose by about 200 pips from 1.126 to 1.146. This sharp surge brought the pair close to its recent high of 1.148.The EUR/USD pair is currently trading just above the 120-day moving average (MA) on the daily chart, and the key focus will be whether it can break above the 120-day MA line at 1.146 with a solid candlestick body.
Among European currencies, the pound surged after the Bank of England raised its policy rate from 0.25% to 0.5% for the second consecutive meeting yesterday, with the GBP/JPY pair rising from 155.04 to 156.50.However, the euro, which is also experiencing confirmed inflation, rose even further. The euro-pound pair surged by about 140 pips from 0.828 to 0.842, hitting a new high for the month.
Today’s schedule includes German manufacturing orders at 16:00 European time, French industrial production at 16:45, remarks by Bank of England Governor Bailey at 17:00, the UK construction PMI at 18:30, and Eurozone retail sales at 19:00,at 21:15, remarks by BOE Deputy Governor Broadbent and MPC member Pill; and during U.S. trading hours, at 22:30, the Canadian unemployment rate and U.S. employment report, followed by the Canadian Ivey PMI at 24:00.With these economic indicators being released during U.S. trading hours, we’ll want to closely monitor whether the rising European currencies and the U.S. dollar will move in tandem.
Author: Keisuke Sakurai
