US Dollar Index Pushes Higher, Sterling Continues to Weaken After BoE Dovish Shift – DailyFX

US Dollar Index Price and Analysis

• The US dollar index hit a one-month high.
• The pound continues to fall after Thursday’s dovish central bank meeting.

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The Bank of England will work with the Federal Reserve and the European Central Bank to lower borrowing costs in June, as a global interest rate cutting cycle looks set to dominate financial markets for months to come. The Swiss National Bank unexpectedly cut its borrowing rate by 25 basis points to 1.5% yesterday. The Swiss central bank is ready to act if necessary to prevent further appreciation of the Swiss franc, it added. Significant depreciation in major G7 currencies supported the rise in the US dollar index.

Bank of England leaves interest rates unchanged; vote turns dovish; GBP/USD declines

USD Index Daily Price Chart

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Despite the dollar’s rise, U.S. Treasury yields are little changed. In contrast, comparable euro and UK two-year bond yields continue to fall as markets continue to reassess recent central bank shifts.

US 2 year bond yield

UK 2 year bond yield

Learn how to trade GBP/USD Free guide included

GBP/USD is trading at a one-month low on early European volume, with further decline expected. The pair is currently located at the 200-day sum, and a confirmation below this technical indicator will enable 1.2547 and the 50% Fibonacci retracement level at 1.2471. You can see 1.2381 below here. If there is a pullback, resistance will be at the 38.2% Fib retracement at 1.2628 and 1.2667.

GBP/USD daily price chart

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According to individual trader data, the long-to-short ratio of traders is 1.66 to 1, with 62.46% of traders being net long. The number of net long traders increased by 35.32% from yesterday and 13.48% from last week. Net short by traders is 29.88% lower than yesterday and 25.16% lower than last week.

Although we usually take a contrarian view of crowd sentiment, The fact that traders are net long suggests GBP/USD price It is likely that it will continue to decline.

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