GBP rises against the dollar and oil rebounds

The British pounds finds a clear way as the dollar declines

By Raed Alkhedr | @raedalkhedr | 31 March 2023

Midday Market update
  • European stocks rise as inflation slows in the Eurozone

  • The British Pound benefits from USD's decline

  • Oil rises, supported by the decline in US inventories and fears of supply shortage

The British pound continues to rise against the US dollar

The British pound rose, benefiting from the sharp fluctuations witnessed by the US dollar index on the back of renewed recession concerns and receding concerns about the banking sector.

The GBP/USD pair has witnessed a noticeable rise since the beginning of this week's trading, trading at $1.2386.

Earlier, the Bank of England decided to raise the interest rate by 25 basis points to reach a final interest rate of 4.25%.

The Bank of England's decision was unanimous by most members of the Monetary Policy Committee, with 7 members voting to raise the interest rate by a quarter of a percentage point, while the remaining 2 members voted to keep interest rates unchanged.

Bank of England Governor "Andrew Bailey" pointed out on Monday that the bank is closely monitoring any signs indicating inflationary pressures.

Oil prices rise, supported by the decline in US inventories

Crude oil prices saw a notable increase during Thursday's trading, supported by the decrease in US crude inventories and growing concerns about supply shortages.

US oil inventory data came in positive, showing a decline of around 7.5 million barrels this week, meaning that demand for crude oil consumption in the United States, the "largest oil consumer in the world," has risen strongly, which supported the rise in oil prices.

The ongoing dispute between the Iraqi government and the Kurdistan region over crude oil also contributed to the rise in prices, which has forced Iraq to stop exporting around 450,000 barrels of crude oil per day, equivalent to 0.5% of global oil supplies.

WTI rose by 2% during Thursday's trading before starting today's trading with some decline, trading near $74 per barrel, while Brent crude oil rose to levels of $78.20 per barrel.