GBP/USD touches session high of 1.4062
Blink and you miss it. Now the pair is up to 1.4067, and is testing the 23.6 retracement level on the hourly chart at 1.4064.
Sterling is feeling some love from European traders, as well as the euro. EUR/USD touches a high of 1.2350 on the day at the same time too.
But the surge in cable so far is more noticeable as the pair is up by 0.65% so far today. Traders are coming in today to some form of positive news in the sense that Ramsden was less dovish than expected in his comments over the weekend. As Eamonn said in his post, it's a perceived turnaround in view from Ramsden - although it's not something that really jumps out.
The dollar continues to trade softer on the day, and buyers in Asia took the pair above the 200-hour MA (blue line) which is an encouraging sign as sentiment turns bullish. Though as Mike pointed out here, look out for offers sitting around 1.4065 and more at 1.4080.
Back to the BOE, right now the OIS market is still only pricing in a 61% chance of a rate hike in May. That's still not exactly a big jump, in fact that figure is lower than last week's probability believe it or not.
So, while sterling is rising on the day, there's not much of a heavy shift in market pricing yet despite Ramsden's supposed change in stance.
In my view, we know the BOE is going to be more hawkish this year and that's going to materialise in a rate hike one way or another; even if there are two dovish members still. And while sterling remains bid at the moment, do look out for potential whipsaws in price action as the rally today does not look like it's from a material change in fundamentals.
Sterling is the best performing major currency on the day
