GBP enjoyed a good run yesterday, following a surprise from the BoE interest rate decision where two members voted to hold interest rates. The other seven elected to cut rates, with two members voting for a 0.50% rate cut.
The bank cut rates by 0.25% as was widely expected. This hawkish surprise now sees markets only pricing-in two further rate cuts by the BoE by the end of the year.
*Daily move - against G10 rates at 7:00 am, 09.05.25
** Indicative rates - interbank rates at 7:00 am, 09.05.25
The dollar has started the day strong ahead of key US-China trade talks this weekend. Reports suggest that the US is aiming to cut China tariffs to less than 60%, should talks go well. It is worth noting that both GBPUSD and EURUSD have fallen through some key support levels, suggesting there could be further downsides, but of course we will need the fundamental story to support this. So, any positive talks from the weekend could well be the catalyst for further dollar gains.
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