GBP/USD reacts to central banks

Note: This section contains information in English only.
Source: Dukascopy Bank SA


The United States Federal Reserve announced its Federal Funds Rate. Markets expected the Fed to keep the base interest rate unchanged at 5.50%. The Fed has done exactly that. However, the US Dollar declined on the announcement, as the market participants must have seen this as a relief from possible rate hike. Namely, inflation has shown to be persistent in the US and a rate hike was a possibility.

After the event, the Chairman of the Federal Reserve Jerome Powell revealed at the follow up press conference that not one but three rate cuts are possible in 2024. These news caused a drop of the Dollar that continued overnight. The Dollar index reached a slow as 102.90, where it found support.

On the GBP/USD charts the fundamental event resulted in a surge which tested the 1.2800 mark. The 1.2800 level forced the rate to decline and look for support in the 1.2760/1.2770 range.

Mid-day on Thursday, the Bank of England published its official bank rate. Markets expected the central bank to keep rate at 5.25%. Bank of England has done, as expected.

Meanwhile, surveyed economists forecast that the Monetary Policy Committee was set to vote with eight members voting for keeping the rate unchanged and one member voting to cut the interest rate. The voting was also guessed right

GBP reacted to the news with a drop downwards, below various support levels.

In the near term future, support could be found in the weekly S1 simple pivot point at 1.2684 and the 1.2680 level. These levels have acted as support during this week.
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Thu, 21 Mar 2024 10:34:49 GMT

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The United States Federal Reserve announced its Federal Funds Rate. Markets expected the Fed to keep the base interest rate unchanged at 5.50%. The Fed has done exactly that. However, the US Dollar declined on the announcement, as the market participants must have seen this as a relief from possible rate hike. Namely, inflation has shown to be persistent

Thu, 21 Mar 2024 10:26:40 GMT

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The United States Federal Reserve announced its Federal Funds Rate. Markets expected the Fed to keep the base interest rate unchanged at 5.50%. The Fed has done exactly that. However, the US Dollar declined on the announcement, as the market participants must have seen this as a relief from possible rate hike. Namely, inflation has shown to be persistent

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