Nov 07, 2022
VOT Research Desk
Following the Bank of England’s 75 basis point rate increase on Thursday, the British pound lost 2% of its value against the US dollar.
The Pound’s decline partially reflected dovish aspects of the policy statement, which indicated that rates could peak lower than priced into financial markets.
Additionally, two of the nine members of the Monetary Policy Committee preferred smaller rate rises, with one wanting 50 bps and another 25 bps.
The Pound’s vulnerability also reflects the challenging macroeconomic environment of the country. While inflation continues to be high, there is a great probability that the UK will experience a recession in the upcoming quarters.
In the coming months, GBPUSD is likely to fluctuate around 1.10.
