The rates continue within the uptrend, although after reaching 8-year highs, we have seen consolidation. The pound continues to receive support due to the tightening of monetary policy, as well as the demand for risky assets. Unlike the US, here the cycle of rising rates has not yet ended, and inflation remains above 10%. At the same time, macroeconomic reports are holding back the pound as unemployment is on the rise.
The yen managed to cope with the pressure and consolidate, thanks to excellent GDP growth in the 1st quarter and a reduction in the trade deficit. At the same time, the monetary policy of the Bank of Japan is unlikely to change this year, which will constantly weaken the yen versus other currencies.
Today, the market is dominated by optimism as the US is making progress in negotiations on the revision of the external debt limit. The pound has also received its share of support as risky assets rise in price. The pound is growing for the second trading day in a row, and is already testing monthly highs. Most technical analysis tools indicate the effectiveness of the deals to BUY in the near future. We believe that such deals will be effective in the near future and investing in pound today.
