Abit of a loaded question but generally speaking shouldn’t the price of gbp/usd have gone up today after BOE interest rate increase decision???
Have I missed something obvious but doesnt a rate increase signify economic strength and usually contributes to an increase in corresponding exchange rate?
I quite agree. However, the volatile current market sentiment conditions, the UK economic downside in general, and the more positive USD economy expectations could have negated the effect of the BOE higher interest rate.
Both monthly and daily trends are downward under the 200SMA which would mean long term positions would not have been affected.
A rate increase is used by central banks largely to control inflation.
A rate increase can increase the respective currency because of better return on investment .
This past month many countries have increased their rates so the FX market is as always looking further ahead - what liklihood is there for further increases.
Problem for GBP is that there is a a fairly negative prognosis for the economy which would curtail further rises. Statements yesterday from the BOE reflect that negativity.
Interest Rate - Countries - List (tradingeconomics.com)
The global financial situation is worsening and the USA is suffering inflation, leading gbp/usd decline.
GBPUSD is declining because the USD market is suffering inflation and it will take some time for the market to uplift.
The global economic situation isn’t going well, affecting the gbpusd market massively.