01 August 2022, GBP/USD
GBPUSD trading plan:
The Bank of England is expected to step up its fight against inflation in this week. The UK central bank’s move will add to the pressure on contenders seeking to replace Boris Johnson as prime minister. Foreign Secretary Liz Truss has promised tax cuts if she wins the race to lead the ruling Conservative Party. Former Chancellor of the Exchequer Rishi Sunak says that would fan inflation, forcing interest rates to go even higher. The BOE was first among major-economy central banks to raise rates after the pandemic, but is struggling to keep up with the US Federal Reserve, which has delivered back-to-back 75 basis-point hikes. Key rates now stand at 1.25% for the BOE, 2.5% for the Fed, and zero at the European Central Bank. The BOE signaled at its June meeting that it would ‘act forcefully’ if it saw signs of persistent inflationary pressure.
Investment idea: buy 1.2170 and take profit 1.2225.
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