All eyes are on the pound’s performance following the rate hike to 0.5%

All eyes are on the pound’s performance following the rate hike to 0.5%

04.02.2022

Yesterday, 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, surging to a level close to its recent high of 1.148.EUR/USD is currently positioned 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 candle.

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 climbing from 155.04 to 156.50. However, the euro, which is also facing inflationary pressures, rose even further. The EUR/GBP pair surged by about 140 pips from 0.828 to 0.842, hitting a new high for the month.

Today, during European trading hours, German manufacturing orders are scheduled for 4:00 PM, French industrial production for 4:45 PM, remarks by Bank of England Governor Bailey for 5:00 PM, the UK Construction PMI for 6:30 PM, and Eurozone retail sales for 7:00 PM;at 21:15, remarks by BOE Deputy Governor Broadbent and MPC member Pill; and during U.S. trading hours, at 22:30, Canada’s unemployment rate and U.S. nonfarm payrolls, followed by the Ivey PMI at 24:00. With these U.S. economic releases, we will be closely monitoring whether the rising European currencies can hold their ground against the U.S. dollar.

Past Market Reports

1. 21.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 20.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 17.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 16.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 15.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 14.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 13.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 10.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 09.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 08.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran