The Pound Sterling (GBP) faces selling pressure, prima facie, after the Bank of England’s (BoE) monetary policy announcement. As expected, the BoE has left interest rates unchanged at 3.75%, with an 8-1 majority. This is the third straight meeting that the BoE has maintained the status quo.
BoE Chief Economist Huw Pill was the one Monetary Policy Committee (MPC) member who dissented from the hold decision and voted for an interest rate hike. Pill was expected to advocate an interest rate hike, as he stated in an event in the middle of the month, that interest rates should be raised for inflation to return to the central bank’s 2% target.
The BoE needs to make decisions that give “the most insurance” against a repeat of the 2022 inflation shock, Pill argued, warning against a “wait and see approach,” Bloomberg reported.
Meanwhile, the US Dollar (USD) faces intense selling despite growing concerns over the Strait of Hormuz outlook and a hawkish Federal Reserve (Fed) hold.
United States (US) President Donald Trump stated on late Wednesday that Washington’s naval blockade of Iranian sea ports will continue until Iran gives up its nuclear ambitions.
On Wednesday, the Fed left interest rates unchanged at 3.50%-3.75%, however, three members of the rate-setting committee dissented the decision and advocated for a move away from the monetary easing bias.
Going forward, investors will focus on the US preliminary Gross Domestic Product (GDP) data, which will be published at 12:30 GMT. On an annualized basis, the US GDP growth is expected to have remained higher at 2.3% against the previous reading of 0.5%.
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Source: https://www.fxstreet.com/news/pound-sterling-faces-pressure-after-boe-leaves-interest-rates-unchanged-at-375-as-expected-202604301110
