Interest Rate Hike Expected in the UK: First Increase in Three Years

Expectations of a UK interest rate hike are a positive catalyst for GBP; sterling is likely to be supported against the Turkish lira in the short term. The technical picture is neutral-to-positive: the price is above the SMA20 and SMA50, RSI at 53 is far from overbought territory, and MACD is slightly below its signal line. Rate hike expectations may already be partly priced in, so the impact could remain limited. I expect a moderate upward bias over a 1-3 day horizon, but volatility risk tied to news flow remains.

Expectations of a UK interest rate hike are a fundamental support factor for GBP, and sterling's rate advantage may widen. The technical picture supports this: the price is above SMA20 and SMA50, RSI at 62 has not entered overbought territory, and MACD is slightly above its signal line. However, RSI in the 60s and limited 24-hour change suggest the move may already be priced in. If the news is not confirmed, the 'buy the expectation, sell the fact' risk remains. Short-term bias is moderately upward, with resistance at 1.35 critical.

Expectations of an interest rate hike in the UK could negatively affect global risk appetite and accelerate outflows from emerging markets. This situation may also create short-term selling pressure in Turkish markets and cause depreciation in the Turkish lira. However, because the expectation is largely priced in, the impact may remain limited. Nevertheless, the rise in global bond yields could increase volatility in equity markets.