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MTrading Team • 2023-08-03

GBPUSD bears keep control despite anticipated BoE rate hike

GBPUSD bears keep control despite anticipated BoE rate hike

Risk aversion intensifies as European traders begin the works of Thursday, after a volatile Wednesday. That said, the fears of a US rating downgrade roiling the nation’s Treasury bond demand dominated the previous day. In doing so, the risk aversion propelled the US Dollar which also gained support from the upbeat ADP Employment Change.

The sour sentiment weighed on the riskier assets on Wednesday, as well as during early Thursday, whereas US Dollar and yields edge higher. It’s worth observing that the GBPUSD dropped to May’s high after breaking the key support the previous day even as markets expect the BoE’s rate hike.

Further, AUDUSD drops the most among the G10 currencies amid mixed Aussie Retail Sales and trade balance, as well as upbeat China Caixin Services PMI.

Elsewhere, crude oil extends pullback from the highest level since April whereas Gold price remains depressed at a three-week low.

It should be noted that the BTCUSD and ETHUSD reverses the previous day’s recovery from the lowest level in six weeks, down for the second consecutive day, as market players expect more regulations despite the record low volatility in the crypto markets.

Following are the latest moves of the key assets:

  • Brent oil drops for the second consecutive day while declining to a fresh one-week low, down 1.1% near $82.60 by the press time.
  • Gold price stays defensive, mildly bid of late, at three-week low near $1,935.
  • USD Index prints six-day uptrend as bulls attack 102.80 hurdle at the latest.
  • Wall Street benchmarks closed in the red and so did the stocks in the Asia-Pacific zone. On the same line, equities in Europe and UK print more than 1.0% intraday losses as we write.
  • BTCUSD and ETHUSD extend the previous day’s losses to $29,000 and $1,830 of late.
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Risk aversion joins upbeat yields to favor GBPUSD bears

Fears of the US bonds losing their credence join the US-China tension and higher interest rate woes to favor the US Dollar. Adding strength to the USD could be the firmer yields, which in turn weigh on the GBPUSD price amid economic fears surrounding the UK, as well as a cautious mood ahead of the BoE Interest Rate Decision.

As a result, the AUDUSD pair justifies its risk-barometer status to ignore firmer China PMI and mostly upbeat data at home.

It should be noted that the Gold Price struggles to keep the bear on the board even as the US Dollar pierces a key resistance line and signals further upside.

Cryptocurrencies remain downbeat as multiple regulators rush toward user safety from major industrial players. Additionally, the declining market momentum also weighs on BTCUSD and ETHUSD.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

BoE, EU PPI and multiple US data on radar

It’s a busy day for the markets as EU PPI will precede the BoE monetary policy decision and several US statistics about employment, activities, growth and inflation. Should these numbers keep challenging the top-tier central banks’ “higher for longer” interest rate decisions, a reduction in the risk-off mood can be witnessed, which in turn may allow the US Dollar to better brace for Friday’s US NFP.

May the trading luck be with you!