EUR/USD Touch 19-year Lows, BoE Interest Rate Decision (EUR/GBP), SNB Signals End Of Its Interest Rate Hiking Cycle (EUR/CHF)

EUR/USD Touch 19-year Lows, BoE Interest Rate Decision (EUR/GBP), SNB Signals End Of Its Interest Rate Hiking Cycle (EUR/CHF)

Summary:

  • The SNB increased its interest rate for a second time on Thursday.
  • BoE increased interest rates on Thursday by 50 basis points.
  • Fed 75bps interest rate hike.

EUR/USD touching 19 year lows

The market is reflecting bearish signals for this currency pair. In the wake of the Federal Reserve's 75bps interest rate hike the falling wedge, which was keeping the door open for bullish reversal possibilities, is invalidated as the EUR/USD has dropped to a new 19-year bottom and is currently clinging to the swing-low from earlier in September, which is located between.9862 and.9876. As a result, the bearish side of the coin is once again in focus for the EUR/USD pair. Resistance is possible around the previous support level of.9950 as well as at parity if bulls can produce a stronger pullback.

EUR/USD Touch 19-year Lows, BoE Interest Rate Decision (EUR/GBP), SNB Signals End Of Its Interest Rate Hiking Cycle (EUR/CHF) - 1 EUR/USD Price Chart

GBP plummeted in the minutes after BoE interest rate announcement

The market is reflecting bearish signals for this currency pair. The Bank of England increased interest rates on Thursday by 50 basis points, which was less than the 75 basis points the market was anticipating, and the British Pound plummeted in the minutes that followed. The pound had a sell-off in response to the boost that was lower than expected, and economists predict greater losses for the UK currency. The exchange rate between the pound and the euro dropped by 0.5 percent to 1.1434 in the 15 minutes after the decision, but it had recovered to 1.1470 by the time the U.S. stock market opened, bringing bank transfer rates to roughly 1.1240 and payment specialist rates to roughly 1.1440.

EUR/USD Touch 19-year Lows, BoE Interest Rate Decision (EUR/GBP), SNB Signals End Of Its Interest Rate Hiking Cycle (EUR/CHF) - 2 EUR/GBP Price Chart

SNB signals the end of their interest rate hiking cycle

The market is reflecting bullish signals for this currency pair. The Swiss National Bank (SNB) increased its interest rate for a second time on Thursday, which caused the Swiss Franc to weaken. However, the SNB also warned against expecting future rate hikes through its inflation projections. After the SNB hiked its cash rate from -0.25% to 0.5% in a monetary policy move that echoed the Federal Reserve's on Wednesday, the Swiss Franc fell against a number of other currencies.

Even while the Swiss central bank did not rule out future interest rate hikes, September's updated predictions suggested that, given the two increases in borrowing costs announced to date, the Swiss inflation rate will likely return to, if not fall below, 2% at the end of the forecast horizon. This suggests that Swiss authorities may already have done enough to bring inflation back in line with their concept of price stability.

EUR/USD Touch 19-year Lows, BoE Interest Rate Decision (EUR/GBP), SNB Signals End Of Its Interest Rate Hiking Cycle (EUR/CHF) - 3 EUR/CHF Price Chart

Sources: finance.yahoo.com, dailyfx.com, poundsterlinglive.com

Rebecca Duthie

Rebecca Duthie

Remote Editor and writer Intern
FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.