Forex News: Pound Rises Amid BoE Rate Hike Speculation

Pound Rises Amid BoE Rate Hike Speculation

(RTTNews) - The British pound strengthened against other major currencies in the European session on Wednesday, due to decreased political unpredictability in the U.K. and anticipation of rising Bank of England (BoE) interest rates.

Due to the disruption of supplies via the Strait of Hormuz caused by increased conflict between the United States and Iran, oil-driven inflation worries are once again in the spotlight. Expectations that the BoE may need to tighten monetary policy have increased due to the recovery in energy prices.

A BoE rate hike is completely priced by the money markets by November, and a second increase is anticipated by March 2027. At the moment, the Bank Rate is set at 3.75 percent by the BoE.

The UK GDP, Industrial Production, and Manufacturing Production statistics, which are due on Thursday, are now the focus of attention in search of new information regarding the economic outlook and the BoE's interest rate trajectory.

In the European trading today, the pound rose to more than a 1-year high of 0.8507 against the euro and a 5-day high of 217.79 against the yen, from early lows of 0.8535 and 217.11, respectively. If the pound extends its uptrend, it is likely to find resistance around 0.83 against the euro and 218.00 against the yen.

Against the U.S. dollar and the Swiss franc, the pound advanced to 1.422 and 1.0881 from early lows of 1.3381 and 1.0831, respectively. The pound may test resistance around 1.36 against the greenback and 1.09 against the franc.

Looking ahead, U.S. weekly EIA crude oil data and U.S. Fed Beige Book report are slated for released later in the day.

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